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Medicare Glossary


B

Beneficiary: The name for a person who has health care insurance through the Medicare or Medicaid program.

Benefit Period: A "benefit period" begins the day you go to a hospital or skilled nursing facility (SNF). The benefit period ends when you haven't received any hospital care (or skilled care in a SNF) for 60 days in a row. If you go into a hospital or a SNF after one benefit period has ended, a new benefit period begins. You must pay the inpatient hospital deductible for each benefit period. There is no limit to the number of benefit periods.

C

Copayment: In some Medicare health and prescription drug plans, the amount you pay for each medical service, like a doctor's visit, or prescription. A copayment is usually a set amount you pay. For example, this could be $10 or $20 for a doctor's visit or prescription. Copayments are also used for some hospital outpatient services in the Original Medicare Plan.

Cost Sharing: The amount you pay for health care and/or prescriptions. This amount can include copayments, coinsurance, and/or deductibles.

D

Deductible (Medicare): The amount you must pay for health care or prescriptions, before Original Medicare, your prescription drug plan, or other insurance begins to pay. For example, in Original Medicare, you pay a new deductible for each benefit period for Part A, and each year for Part B. These amounts can change every year.

Drug List: A list of drugs covered by a plan. This list is also called a formulary.

F

Formulary: A list of drugs covered by a plan.

G

Guaranteed Renewable: A right you have that requires your insurance company to automatically renew or continue your Medigap policy, unless you make untrue statements to the insurance company, commit fraud or don't pay your premiums.

L

Long Term Care: A variety of services that help people with health or personal needs and activities of daily living over a period of time. Long term care can be provided at home, in the community, or in various types of facilities, including nursing homes and assisted living facilities. Most long term care is custodial care. Medicare doesn't pay for this type of care if this is the only kind of care you need.

M

Medicaid: A joint Federal and State program that helps with medical costs for some people with low incomes and limited resources. Medicaid programs vary from state to state, but most health care costs are covered if you qualify for both Medicare and Medicaid.

Medical Underwriting: The process that an insurance company uses to decide, based on your medical history, whether or not to accept your application for insurance, whether or not to add a waiting period for pre-existing conditions (if your state law allows it), and how much to charge you for that insurance.

Medicare Advantage Plan: A plan offered by a private company that contracts with Medicare to provide you with all your Medicare Part A and Part B benefits. Medicare Advantage Plans are HMOs, PPOs, or Private Fee for Service Plans. If you are enrolled in a Medicare Advantage Plan, Medicare services are covered through the plans, and are not paid for under Original Medicare.

Medicare Advantage Prescription Drug Plan (MAPD): A Medicare Advantage plan that offers Medicare Prescription Drug coverage and Part A and Part B benefits in one plan.

Medicare Coverage: Made up of two parts: Hospital Insurance (Part A) and Medical Insurance (Part B). (See Medicare Part A (Hospital Insurance); Medicare Part B (Medical Insurance).)

Medicare Prescription Drug Coverage: Optional coverage available to all people with Medicare through insurance companies and other private companies.

Medigap Open Enrollment Period: A "one time only" six month period when you can buy any Medigap policy you want that is sold in your state. It starts in the first month that you are covered under Medicare Part B and you are age 65 or older. During this period, you can't be denied coverage or charged more due to past or present health problems.

Medigap Policy: Medicare Supplement insurance sold by private insurance companies to fill "gaps" in Original Medicare Plan coverage. Except in Massachusetts, Minnesota, and Wisconsin, there are 12 standardized plans labeled Plan A through Plan L. Medigap policies only work with the Original Medicare Plan.

O

Original Medicare Plan: A Fee-for-Service health plan that lets you go to any doctor, hospital, or other health care supplier who accepts Medicare insurance and is accepting new Medicare patients. You must pay the deductible. Medicare pays its share of the Medicare-approved amount, and you pay your share (coinsurance). In some cases you may be charged more than the Medicare-approved amount. The Original Medicare Plan has two parts: Part A (Hospital Insurance) and Part B (Medical Insurance).

P

Penalty: An amount added to your monthly premium for Medicare Part B, or for a Medicare Prescription Drug Plan, if you don't join when you're first able to. You pay this higher amount as long as you have Medicare. There are some exceptions.

Pre-existing Condition: A health condition you had before the date that a new insurance policy starts.

Premium: The periodic payment to Medicare, an insurance company, or a health care plan for health care or prescription drug coverage.

Private Fee-for-Service Plan: A type of Medicare Advantage Plan in which you may go to any Medicare-approved doctor or hospital that accepts the plan's payment. The insurance plan, rather than the Medicare Program, decides how much it will pay and what you pay for the services you get. You may pay more or less for Medicare-covered benefits. You may have extra benefits the Original Medicare Plan doesn't cover.

S

Secondary Payer: An insurance policy, plan, or program that pays second on a claim for medical care. This could be Medicare, Medicaid, or other insurance depending on the situation.

Special Election Period: A set time that a beneficiary can change health plans or return to the Original Medicare Plan, such as: you move outside the service area, your Medicare+Choice organization violates its contract with you, the organization does not renew its contract with CMS, or other exceptional conditions determined by CMS. The Special Election Period is different from the Special Enrollment Period (SEP).

Special Enrollment Period: A set time when you can sign up for Medicare Part B if you didn't' t take Medicare Part B during the Initial Enrollment Period, because your or your spouse were working and had group health plan coverage through the employer or union. You can sign up anytime you are covered under the group plan based on current employment status. The last eight months of the Special Enrollment Period starts the month after the employment ends or the group health coverage ends, whichever comes first.

Special Needs Plan: A special type of plan that provides more focused health care for specific groups of people, such as those who have both Medicare and Medicaid, who reside in a nursing home, or who have certain chronic medical conditions.

T

Tiers: To have lower costs, many plans place drugs into different tiers, which cost different amounts. Each plan can form their tiers in different ways. Here is an example of how a plan might form its tiers.

Example:

  • Tier 1 - Generic drugs. Tier 1 drugs will cost you the least amount.
  • Tier 2 - Preferred brand-name drugs. Tier 2 drugs will cost you more than Tier 1 drugs.
  • Tier 3 - Non-preferred brand-name drugs. Tier 3 drugs will cost you more than Tier 1 and Tier 2 drugs.

W

Waiting Period: The period that must pass before an employee or dependent is eligible to enroll (become covered) under the terms of the group health plan. If the employee or dependent enrolls as a late enrollee or on a special enrollment date, any period before the late or special enrollment is not a waiting period. If a plan has a waiting period and a pre-existing condition exclusion, the pre-existing condition exclusion period begins when the waiting period begins. Days in a waiting period are not counted toward creditable coverage unless there is other creditable coverage during that time. Days in a waiting period are not counted when determining a significant break in coverage.


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