Medicare Glossary: Understanding Key Terms and Definitions

Navigating Medicare terminology can be complicated for anyone new to the program. To help you understand key terms and definitions related to Medicare coverage, we have compiled this comprehensive glossary covering everything from parts A, B, C, and D to premiums, enrollment periods, and beyond.

Whether you are looking to enroll soon or are just beginning to explore your options, this glossary serves as a helpful guide to the Medicare landscape. We explain 100 common Medicare terms in clear, straightforward language to provide you with a strong foundation of program knowledge. Use this as your go-to reference anytime you encounter unfamiliar acronyms, benefit specifics, or enrollment rules.

With this Medicare glossary by your side to decode crucial vocabulary, you can feel confident and informed

1. Medicare

Medicare is a federal health insurance program in the United States, primarily for people aged 65 and older, as well as for some younger individuals with disabilities. It consists of Part A (hospital insurance), Part B (medical insurance), Part C (Medicare Advantage plans), and Part D (prescription drug coverage).

2. Medicaid

Medicaid is a joint federal and state program that provides healthcare coverage to low-income individuals and families. Eligibility and benefits vary by state.

3. Medicare Advantage

Medicare Advantage (Part C) is an alternative to traditional Medicare. Private insurance companies offer these plans, which often include additional benefits like prescription drug coverage and wellness programs.

4. Medigap

Medigap, also known as Medicare Supplement Insurance, is a type of private insurance that helps cover Medicare costs such as copayments, deductibles, and coinsurance.

5. Part A

Medicare Part A covers inpatient hospital care, skilled nursing facility stays, hospice care, and some home healthcare services.

6. Part B

Medicare Part B covers outpatient medical services, preventive care, doctor visits, and durable medical equipment.

7. Part C

Medicare Part C, or Medicare Advantage, combines Part A and Part B coverage, often including additional benefits like dental and vision care.

8. Part D

Medicare Part D is prescription drug coverage that can be added to Original Medicare or included in some Medicare Advantage plans.

9. Copayment

A copayment (copay) is a fixed amount you pay for covered healthcare services or prescription drugs, typically due at the time of service.

10. Deductible

A deductible is the initial amount you must pay for covered healthcare services or prescription drugs before your insurance begins to pay.

11. Coinsurance

Coinsurance is a percentage of the cost of a covered healthcare service that you share with your insurance provider after meeting your deductible.

12. Medicare Enrollment Periods

These are specific times when individuals can enroll in Medicare or make changes to their coverage, such as the Initial Enrollment Period and Annual Enrollment Period.

13. Medicare Part A Premium

Some individuals pay a premium for Medicare Part A, while others receive it premium-free based on their work history.

14. Medicare Beneficiary

A Medicare beneficiary is an individual who qualifies for and receives Medicare benefits.

15. Original Medicare

Original Medicare refers to Medicare Part A and Part B provided by the federal government.

16. Medicare Cost Plan

A Medicare Cost Plan is a type of Medicare health plan available in certain areas. It combines features of HMOs and PPOs and allows members to use out-of-network providers.

17. Medicaid Expansion

Medicaid expansion is a provision of the Affordable Care Act (ACA) that allows states to extend Medicaid eligibility to more low-income adults.

18. Medicare Savings Program

Medicare Savings Programs are state programs that help individuals with limited income and resources pay for Medicare premiums, deductibles, and coinsurance.

19. Medicare Part A and Part B Premiums

These are the monthly fees individuals pay for Medicare Part A and Part B coverage.

20. Medicare Annual Wellness Visit

The Medicare Annual Wellness Visit is a yearly appointment with a healthcare provider to create or update a personalized prevention plan.

21. Medicare Advantage Open Enrollment Period

This period allows individuals already enrolled in a Medicare Advantage plan to switch plans or return to Original Medicare.

22. Special Enrollment Period (SEP)

SEPs are specific times when individuals can make changes to their Medicare coverage outside of the usual enrollment periods, often due to life events like moving or losing other coverage.

23. Part D Coverage Gap (Donut Hole)

The Part D coverage gap is a temporary limit on what a Medicare drug plan will cover for prescription drugs. Beneficiaries may pay more for their medications during this phase.

24. Extra Help (Low-Income Subsidy)

Extra Help is a program that helps individuals with limited income and resources pay for Medicare prescription drug costs.

25. Medicare Summary Notice (MSN)

The Medicare Summary Notice is a quarterly statement that provides a summary of healthcare services and supplies billed to Medicare in a clear, easy-to-understand format.

26. Medicare Advantage Disenrollment Period

The Medicare Advantage Disenrollment Period is a limited period each year (January 1st to February 14th) when individuals enrolled in a Medicare Advantage plan can disenroll from the plan and return to Original Medicare.

27. Medicare Part C Premium

This is the monthly premium that individuals pay to their Medicare Advantage (Part C) plan in addition to their Medicare Part B premium.

28. Medically Necessary

A healthcare service or item is considered “medically necessary” when it is required to diagnose or treat a medical condition, injury, illness, or disease.

29. Dual Eligible

Dual eligible individuals are eligible for both Medicare and Medicaid benefits, often providing additional financial assistance for healthcare costs.

30. Medicare Administrative Contractor (MAC)

Medicare Administrative Contractors are private entities that process Medicare claims and provide administrative services on behalf of the Centers for Medicare & Medicaid Services (CMS).

31. Medicare Part D Initial Enrollment Period

This is the period when individuals can first enroll in a Medicare Part D prescription drug plan, typically when they first become eligible for Medicare.

32. Medicare Part D Late Enrollment Penalty

A late enrollment penalty may be applied to an individual’s Medicare Part D premium if they do not enroll in a prescription drug plan when first eligible, and they go without creditable prescription drug coverage for an extended period.

33. Guaranteed Issue Right

A guaranteed issue right is a right to enroll in a Medicare Supplement Insurance (Medigap) plan without being subject to medical underwriting, usually in specific circumstances, such as when an individual loses their existing coverage.

34. Medicare Advantage Special Needs Plan (SNP)

SNPs are a type of Medicare Advantage plan designed to meet the unique needs of individuals with specific health conditions, such as chronic illnesses or institutionalized care.

35. Qualified Medicare Beneficiary (QMB) Program

The QMB Program is a Medicaid program that helps low-income individuals pay for Medicare premiums, deductibles, and coinsurance.

36. Advance Beneficiary Notice (ABN)

An Advance Beneficiary Notice is a notice that healthcare providers give to Medicare beneficiaries when providing services or items that Medicare may not cover. It informs the beneficiary of their financial responsibility.

37. Medicare Savings Account (MSA) Plan

An MSA Plan is a type of Medicare Advantage plan that combines a high-deductible health plan with a savings account. Medicare deposits money into the account, which can be used for healthcare expenses.

38. Qualified Health Plan (QHP)

A Qualified Health Plan is a health insurance plan that meets the requirements for coverage under the Affordable Care Act (ACA).

39. Medicare Open Enrollment Period (OEP)

The Medicare Open Enrollment Period allows individuals to make changes to their Medicare Advantage or Part D plans, including switching plans, each year from October 15th to December 7th.

40. Medicare Cost Sharing

Medicare cost sharing refers to the portion of healthcare costs that beneficiaries are responsible for, including copayments, deductibles, and coinsurance.

41. Skilled Nursing Facility (SNF) Care

Skilled Nursing Facility care is a level of care that includes medical services and rehabilitation provided in a certified facility, typically after a hospital stay.

42. Medicare Part B Late Enrollment Penalty

A late enrollment penalty for Medicare Part B may be applied to an individual’s premium if they do not enroll when first eligible and do not have creditable coverage from another source.

43. Medicare Wellness Visits

Medicare Wellness Visits are preventive health appointments for beneficiaries to develop a personalized plan to help prevent disease and improve health.

44. Social Security Administration (SSA)

The SSA is a federal agency responsible for administering Social Security and, in part, Medicare benefits.

45. Catastrophic Coverage

Catastrophic coverage in Medicare Part D is a phase of coverage where beneficiaries pay significantly lower costs for prescription drugs after reaching a certain out-of-pocket spending threshold.

46. Medicaid Spend Down

Medicaid Spend Down is a process in which individuals with income above the Medicaid eligibility limit can “spend down” their excess income on medical expenses to become eligible for Medicaid benefits.

47. Medicare Star Ratings

Medicare Star Ratings are a system used to evaluate and rate the quality and performance of Medicare Advantage and Part D plans, helping beneficiaries make informed choices.

48. Medicare Beneficiary Identifier (MBI)

The MBI is a unique, randomly generated Medicare identification number replacing the Social Security Number-based Health Insurance Claim Number (HICN) for privacy and security reasons.

49. Medicare Coverage Gap Discount Program

This program provides discounts on prescription drugs for beneficiaries who reach the Part D coverage gap, commonly known as the “Donut Hole.”

50. Skilled Nursing Facility (SNF) Benefit Period

The SNF Benefit Period is a Medicare-defined period during which a beneficiary can receive skilled nursing care, with certain conditions and coverage limitations.

51. Hospital Readmission Reduction Program

The Hospital Readmission Reduction Program is a Medicare initiative that penalizes hospitals with excessive readmissions for certain conditions, encouraging quality improvement and cost reduction.

52. State Health Insurance Assistance Program (SHIP)

SHIP is a state-level program that provides free counseling and assistance to Medicare beneficiaries regarding their healthcare coverage options, rights, and benefits.

53. Low-Income Subsidy (LIS) Program

The Low-Income Subsidy Program, also known as “Extra Help,” assists low-income Medicare beneficiaries with paying for their prescription drug costs under Medicare Part D.

54. Medicare Part D Formulary

A Medicare Part D Formulary is a list of prescription drugs covered by a specific Medicare Part D prescription drug plan. It may include tiers indicating drug cost levels.

55. Medically Needy Pathway

The Medically Needy Pathway is a Medicaid program that allows individuals with high medical expenses to qualify for Medicaid even if their income exceeds standard Medicaid limits.

56. Medicare Disproportionate Share Hospital (DSH) Payments

Medicare DSH payments are financial assistance to hospitals that serve a significant number of low-income and uninsured patients, helping them offset the costs of uncompensated care.

57. Coordination of Benefits (COB)

COB is a process that helps determine which health insurance plan pays first when an individual is covered by multiple insurance policies, such as Medicare and employer-sponsored coverage.

58. State Buy-In Program

State Buy-In Programs allow states to purchase Medicare Part A coverage for low-income residents, ensuring they have access to hospital insurance.

59. Medicare Cost Report

A Medicare Cost Report is a financial document submitted by healthcare providers to report their costs and expenses to Medicare, used for reimbursement calculations.

60. Medicare Secondary Payer (MSP)

MSP rules dictate when Medicare is a secondary payer for healthcare services when other insurance or coverage is available, such as through an employer.

61. Medicare Part D Coverage Determination

A Coverage Determination is a decision by a Medicare drug plan regarding whether a specific prescription drug is covered and under what conditions.

IRMAA is an additional amount that higher-income Medicare beneficiaries must pay for Medicare Part B and Part D premiums.

63. Medicare Administrative Appeals

Medicare beneficiaries have the right to appeal denials of coverage or payment decisions made by Medicare, allowing them to seek a review and potential reversal of these decisions.

64. Medicare Savings Program Asset Limits

Medicare Savings Program asset limits refer to the maximum value of assets or resources that individuals can have while still qualifying for assistance through these state programs.

65. State Pharmaceutical Assistance Programs (SPAPs)

SPAPs are state-level programs that provide additional prescription drug cost assistance to eligible Medicare beneficiaries beyond what is covered by Medicare Part D.

66. Medicare Part C Special Enrollment Period (SEP)

SEPs for Medicare Advantage (Part C) plans allow individuals to enroll or make plan changes outside of the standard enrollment periods under certain qualifying circumstances.

67. Qualified Disabled and Working Individuals (QDWI) Program

The QDWI program assists disabled individuals who work but have lost their premium-free Medicare Part A coverage due to their income.

68. Independent Review Entity (IRE)

IREs are independent organizations contracted by Medicare to review and resolve beneficiary appeals related to denied coverage or payment.

69. Medicare Advantage Open Enrollment Period (MA OEP)

MA OEP allows individuals enrolled in Medicare Advantage plans to make one change to a different Medicare Advantage plan or return to Original Medicare within the first three months of the year.

70. Medicare Savings Program (MSP) Categories

MSP categories specify different levels of assistance provided by state programs to help low-income individuals pay for Medicare premiums and cost-sharing.

71. National Coverage Determinations (NCDs)

NCDs are decisions made by the Centers for Medicare & Medicaid Services (CMS) regarding whether Medicare will cover specific medical treatments, services, or items nationwide.

72. Medicare Part B Excess Charges

Excess charges are additional fees that some healthcare providers may charge Medicare beneficiaries if they do not accept Medicare assignment.

73. Medicare Part C Maximum Out-of-Pocket (MOOP)

MOOP is the maximum amount of money a Medicare Advantage plan beneficiary is required to pay out-of-pocket for covered services during a plan year.

74. Medicare Beneficiary Ombudsman

The Medicare Beneficiary Ombudsman is an independent advocate within CMS who assists beneficiaries with complaints, grievances, and inquiries regarding their Medicare coverage and services.

75. Competitive Bidding Program

The Competitive Bidding Program is a Medicare initiative that helps lower costs for certain durable medical equipment and supplies by requiring suppliers to bid on contracts to provide these items to beneficiaries.

76. Original Medicare vs. Medicare Advantage

Original Medicare refers to Medicare Part A and Part B provided by the federal government. Medicare Advantage, or Part C, is an alternative to Original Medicare offered by private insurance companies, often including additional benefits.

77. Donut Hole (Coverage Gap)

The Donut Hole, or coverage gap, is a phase in Medicare Part D where beneficiaries pay a higher percentage of their prescription drug costs until they reach the catastrophic coverage threshold.

78. Medicare Part D Initial Coverage Limit

The Initial Coverage Limit is the total drug cost amount that a Medicare Part D beneficiary must reach before entering the coverage gap.

79. Medically Necessary Services and Supplies

Medically necessary services and supplies are healthcare treatments, tests, and equipment that are essential for diagnosing, preventing, or treating a medical condition.

80. Medicare Part A and Part B Claims

Claims are requests submitted by healthcare providers to Medicare for reimbursement of covered services and supplies provided to beneficiaries.

81. Medicare Advantage Disenrollment Period (MADP)

The MADP allows individuals enrolled in Medicare Advantage plans to disenroll from the plan and return to Original Medicare between January 1st and February 14th each year.

82. Medicaid Estate Recovery

Medicaid Estate Recovery is a process by which states can recover the costs of certain Medicaid benefits from the estates of deceased beneficiaries.

83. Medicare Part D Star Ratings

Medicare Part D Star Ratings are scores that assess the quality and performance of prescription drug plans, helping beneficiaries choose the most suitable plan.

84. Qualified Medicare Enrollment Specialist (QMES)

QMES are individuals certified to provide assistance and guidance to Medicare beneficiaries regarding their healthcare coverage options.

85. Medicare Advantage Trial Right

Trial Rights allow Medicare beneficiaries to try a Medicare Advantage plan for up to 12 months and return to Original Medicare if they are not satisfied with the plan.

86. Part D Late Enrollment Period

The Part D Late Enrollment Period is a time when individuals can enroll in a Medicare Part D plan outside of their initial enrollment period but may incur late enrollment penalties.

IRMAA tiers are income levels used to determine the additional premium amounts higher-income Medicare beneficiaries must pay for Part B and Part D coverage.

88. Medicare Savings Program (MSP) Income Limits

MSP income limits specify the maximum income levels that individuals and couples can have to qualify for assistance through these state programs.

89. Social Security Disability Insurance (SSDI)

SSDI is a federal program that provides benefits to individuals with disabilities who have paid into the Social Security system.

90. Medicaid Managed Care

Medicaid Managed Care refers to a system in which Medicaid beneficiaries receive their benefits through managed care organizations (MCOs) that coordinate and provide healthcare services.

91. Medicare Advantage Special Enrollment Period for Dual-Eligible Beneficiaries

Dual-eligible beneficiaries can enroll in or switch Medicare Advantage plans at any time throughout the year.

92. Special Needs Plan (SNP) Dual-Eligible

SNP Dual-Eligible plans are designed for individuals who qualify for both Medicare and Medicaid benefits, offering coordinated healthcare services.

93. Medicare Summary Notice (MSN) Explanation of Benefits

The MSN Explanation of Benefits is a document sent to Medicare beneficiaries explaining the services, supplies, or equipment provided and billed to Medicare.

94. Part B Premium Penalty

A Part B Premium Penalty is a financial penalty applied to the monthly premium for Medicare Part B coverage if an individual delays enrollment without creditable coverage.

95. Medicare State Health Insurance Assistance Program (SHIP) Counselors

SHIP Counselors are trained volunteers or professionals who provide free, unbiased counseling and assistance to Medicare beneficiaries.

96. Medicare Savings Program (MSP) Premiums

MSP Premiums are state programs that pay some or all of an individual’s Medicare Part A and Part B premiums, depending on income and resources.

97. State Buy-In Program Premiums

State Buy-In Program Premiums are the costs that states pay to cover Medicare Part A premiums for eligible low-income residents.

98. Health Maintenance Organization (HMO) Plans

HMO Plans are a type of Medicare Advantage plan that requires beneficiaries to use a network of doctors and hospitals for their healthcare services.

99. Preferred Provider Organization (PPO) Plans

PPO Plans are a type of Medicare Advantage plan that allows beneficiaries to see any healthcare provider but offers lower costs for using network providers.

100. Chronic Care Special Needs Plan (C-SNP)

C-SNPs are Medicare Advantage plans tailored for individuals with specific chronic conditions, providing targeted care coordination and benefits.