Medicare Glossary of Terms

Medicare Glossary of Terms

Annual Election Period (AEP): The annual enrollment period that begins on October 15 and ends December 7; Medicare beneficiaries can take this opportunity to make changes to their coverage.

Coinsurance: The amount you may be required to pay as your share of the cost for services after you pay any deductibles. It is usually a percentage of the total cost.

Copayment: The amount you may have to pay as your share of the cost for a medical service or supply; usually a set amount, rather than a percentage, such as $10 or $20 for a doctor's visit or prescription.

Deductible: A yearly amount you must pay for healthcare services, supplies, or prescriptions before your Medicare insurance plan, your prescription drug plan, or other insurance begins to pay.

Durable Medical Equipment (DME): DME includes medically necessary supplies and equipment that your doctor prescribes for use in your home; includes, but is not limited to, crutches, walkers, hospital beds, blood sugar monitors, oxygen equipment, wheelchairs, and more.

Formulary: List of drugs covered by a specific prescription drug plan.

HMO: Health Maintenance Organization; a type of Medicare Advantage plan in which beneficiaries choose within a network of providers and suppliers; includes Part A and Part B benefits, but often includes additional coverage.

Medicare Part A: Hospital insurance; helps cover inpatient care in hospitals, skilled nursing facilities, hospice, and home health care.

Medicare Part B: Medical insurance; helps cover doctors’ services, outpatient care, home health care, and some preventive services. There is usually a premium for Part B, and you will likely pay an annual deductible and copayments.

Medicare Part C: Medicare Advantage; health coverage offered by private insurance companies approved by and under contract with Medicare. It includes Part A, Part B, and usually additional coverage, such as prescription drug benefits, vision and/or dental care.

Medicare Part D: Prescription Drug Coverage; offered by private insurance companies approved by and under contract with Medicare to help cover the cost of prescription drugs.

Medigap: Medicare Supplement policies help cover the costs that Original Medicare does not. During your initial Medigap enrollment period, you have a guaranteed issue right to buy any Medigap policy sold in your state without being subject to medical underwriting.

Out-of-Pocket Expenses: The health or drug costs you must pay on your own, including deductibles, copayments, and coinsurance not covered by your insurance plans.

Penalty: If you don’t enroll in a Part B or Part D plan when you are first eligible, you may incur a late enrollment penalty; when you choose to enroll later on, an amount is added to your monthly premium for as long as you have Medicare.

Premium: The periodic payment you make to your Medicare insurance plan for health or prescription drug coverage.

Preventive Services: Healthcare services and screenings to prevent illness or detect illness at an early stage; many preventive services are offered by Medicare at little or no cost.

PPO: Preferred Provider Organization; a type of Medicare Advantage plan offered by a private insurance company. You pay less if you use doctors, hospitals, and other health care providers that belong to the plan's network, but you can use doctors, hospitals, and providers outside of the network for an additional cost.

Special Needs Plan(SNP): A type of Medicare Advantage plan that provides specialized healthcare for individuals with specific needs or circumstances, such as those who live in a nursing home, or have certain chronic medical conditions.