Author

Sharon O'Day

The decisions you make about your Medicare coverage as you approach age 65 will have lasting implications for the quality and ease of your retirement years. Yet, the vast amount of unfamiliar Medicare terminology makes it difficult to capture Medicare's real opportunities.
We present this Medicare glossary to help you understand the language of Medicare.

Agreement from a doctor to accept Medicare's approved amount as full payment for a service. Under Original Medicare, if a doctor accepts assignment, the patient's payment is limited to the 20% coinsurance of the approved amount.

Groups of doctors, hospitals, and other health care professionals who join together to improve the quality of patient care while lowering the cost of Medicare by avoiding duplication of services and preventing medical errors.

The fundamental tasks required to care for oneself independently, including grooming, dressing, toileting, mobility, feeding, and bathing.

A notice that a health care provider or supplier must give an Original Medicare beneficiary before providing care when they believe Medicare will not cover their services or items, also known as a waiver of liability.

A notice from a Medicare Advantage plan to a beneficiary advising in advance whether a specific service will be covered.

A legal document a person signs outlining how medical and financial decisions will be made if that person is no longer capable of communicating their preferences. When focused on health, it can include a health care power of attorney, health care proxy, and living will.

The period — also known as the Fall Open Enrollment — between October 15 and December 7 every year when beneficiaries can switch between Original Medicare and Medicare Advantage, enroll in a new Medicare Advantage plan, or sign up for Part D if they didn't do so during their Initial Enrollment Period. Changes take effect the following January 1.

A notice beneficiaries receive from their private Medicare Advantage and Part D plans at least two weeks before the October 15 start of the AEP, announcing any changes in their coverage, costs, or service areas for the coming year.

A formal review process a Medicare beneficiary can call upon in the case of disagreement with Medicare-related coverage or payment decisions. The process must follow federal regulations specified for deadlines, processes, required information, and steps in the appeals sequence.

Acceptance by a doctor, service provider, or supplier to consider the Medicare-approved amount as full payment for a service or good, with no recourse to bill the patient further.

The difference between Medicare's approved amount for a service and the amount charged by a health care provider who does not accept Medicare assignment — also known as excess charges.

A period wherein Medicare Part A pays for hospital and skilled nursing facility services, starting the day the patient is admitted formally as an inpatient and ending once the patient has not received any further services for 60 consecutive days. A new hospitalization will trigger a new benefit period and require payment of the Part A deductible again.

The last of four payment phases of a Part D prescription drug plan, during which the beneficiary pays a small coinsurance or copayment for covered drugs for the rest of the calendar year.

A request for payment submitted by health care providers for goods and services a beneficiary has received. Medicare processes those for Part A and Part B, and private insurers process those for Medicare Advantage and Part D plans.

COBRA is a law that stands for the “Consolidated Omnibus Budget Reconciliation Act,” which protects employees and their families when employer-sponsored health benefits are lost. They can continue in the employer's group health plan for a set period but will have to pay the total cost of the coverage, not the discounted employee rate.

In reference to Medicare only, coinsurance is the percentage a beneficiary pays of the Medicare-approved cost of a covered service after paying any deductibles. For example, the beneficiary pays the remaining 20% after Medicare Part B pays its 80% share.

A type of health care plan, also known as Medicare Advantage or managed care plans, that provides all the same services as Original Medicare but through a network of approved providers with whom the insurer has negotiated pricing, resulting in cost-effective care. Beneficiaries may be restricted to the plan's network of doctors and hospitals — or pay all or part of the bill.

A predetermined amount a Medicare Advantage beneficiary may have to pay before receiving each medical service or supply, such as $20 for a doctor visit or $15 for a prescription drug — also known as a copay.

The out-of-pocket cost a beneficiary pays for health care services and prescriptions through copayments, coinsurance, and deductibles as their contribution toward the total Medicare-defined cost.

The third payment phase of a Part D prescription drug plan, during which the beneficiary pays 25% of the cost of covered prescription drugs, also known as the donut hole.

Prescription drug coverage from a source such as an employer that is equal to — or better than — Medicare Part D coverage, which allows a beneficiary to delay enrolling in Medicare's Part D without incurring late enrollment penalties.

A small rural hospital that meets specific guidelines, such as having 25 beds or less, average hospital stays of 96 hours or less, and providing 24/7 emergency care through an on-call physician or registered nurse with emergency care training.

Non-medical care provided by non-skilled caregivers, particularly related to activities of daily living (ADLs) such as eating, bathing, toileting, and dressing. With the exception of some innovative programs available through Medicare Advantage, Medicare doesn't pay for custodial care.

The amount beneficiaries pay each year out of pocket for medical services or prescription drugs before their health plan begins to pay for benefits.

The third payment phase of a Part D prescription drug plan, during which the beneficiary pays its highest share of covered prescription drug costs. Also known as the coverage gap.

An individual who qualifies for both Medicare and Medicaid coverage.

Medical equipment such as wheelchairs, walkers, oxygen equipment, and hospital beds that can be used repeatedly within the home. Medicare only covers the cost of DMEs if ordered by a doctor.

A legal document that authorizes an individual to make decisions that can extend to all pertinent areas of the signatory’s life and remains in effect if that person becomes incapacitated through accident, illness, or mental decline. The authorization ends if revoked or when the signatory dies.

Kidney disease that requires a kidney transplant or ongoing dialysis. ESRD patients can qualify for Medicare, regardless of age.

The required marketing document that lists all of the Medicare Advantage and Part D plan benefits of a particular plan and how to access care. This document can be found on the Plan’s website on October 15th every year and lists the benefits for the next year.

A prescription drug coverage determination involving Part D or Medicare Advantage plans. Tiering exceptions hope to get better cost-sharing terms, and formulary exceptions aim to add a drug to a medication list or waive restrictions to access a drug.

The difference between Medicare's approved amount for a service and the amount charged by a health care provider who does not accept Medicare assignment, also known as balance billing.

A Medicare program — also known as Part D Low-Income Subsidy (LIS) — designed to help individuals with limited income and resources pay for Part D premiums, deductibles, and other out-of-pocket costs.

The list of prescription drugs covered by a specific standalone Part D or Medicare Advantage plan. Lists vary from plan to plan and can be changed by insurers each year.

A period from January 1 through March 31 each year when qualified individuals can first enroll in Medicare Part B if they missed their Initial Enrollment Period (IEP) and don't qualify for a Special Enrollment Period (SEP). A late enrollment penalty may result. Coverage starts the first of the month after enrollment.

A lower-cost alternative to a brand-name drug that uses the same active ingredients, works the same way, and is approved by the Food and Drug Administration (FDA).

A formal complaint a beneficiary files with their Medicare Advantage or Part D plan within 60 days of a disappointing administrative or customer service event. Issues related to denied coverage or supply require an appeal, not a grievance.

Health insurance offered to employees and their families by an employer or employee organization. The company's size determines if the insurance is a primary or secondary payer to Medicare.

Consumer protection for individuals aged 65 or older that ensures their right to purchase Medicare Supplement (Medigap) insurance within 63 days of losing certain kinds of health coverage. Conditions are identical to those when individuals first qualify for Medicare.

Legal assurance that the insurer cannot terminate an insurance plan at the end of a term unless the beneficiary fails to pay premiums, commits fraud, or makes a material misrepresentation when applying for the plan.

An individual or facility qualified and licensed to provide health care, such as doctors, nurses, and hospitals.

A type of Medicare Advantage plan in which beneficiaries must go to doctors and hospitals within the plan's network of contracted providers, except in emergencies. Coverage often also requires a referral from a primary care provider (PCP).

A type of Medicare Advantage plan with a significant deductible to be met before the insurance company starts paying its share. Monthly premiums are often lower, and some plans include health savings accounts (HSAs) from which certain medical expenses can be paid with tax-free funds.

A Medicare-certified organization that provides homebound beneficiaries with home care services that their doctors order, including skilled nursing services and therapeutic services such as physical and occupational therapy, but not custodial care.

An end-of-life program of pain management and comfort tailored to the needs of someone who is terminally ill, their family, and their caregivers. Care is provided in the home or at a hospice facility.