Medicare 101: Medicare Definitions and Terms

Your guide to common Medicare lingo.

Common Medicare definitions, terms and acronyms

If you’re new to Medicare, you may feel a bit bewildered by all the new terms and phrases you’ll hear. That’s why we’ve created this helpful glossary of common Medicare definitions for terms and acronyms explained in plain English. 

To find the Medicare term or phrase you’re looking for by selecting its first letter from the alphabet tool below. 

Can’t find what you’re looking for? Talk to a licensed agent today at 833-716-0673.

Jump to: 

ABCDEFGHIJKLMNOPQR –  STUVWXY –  Z

A

Accreditation

A quality-assurance process that helps ensure you receive health care services from a provider that has met a specific set of established standards. This process involves certified organizations (called “accrediting bodies”) evaluating the procedures, policies, and performance of health care facilities and practitioners to make sure you receive quality care.

 

Annual Enrollment Period (AEP)

Also called “Annual Election Period,” AEP is a time period that occurs every year, during which you can enroll in Medicare plans or make changes to your existing Medicare plan. The Annual Enrollment Period runs from October 15 to December 7 each year. 

 

Appeal

If you disagree with any coverage or payment decisions that Medicare makes, an appeal allows you to express your disagreement and request Medicare to review your case. For example, you can submit an appeal if Medicare denies your request for:

 

  • Payment for a health care service, provider, or prescription drug for which you believe you are eligible
  • Payment for a health care service, provider, or prescription drug that you have already received
  • A change in the amount that Medicare has already paid for a health care service, provider, or prescription drug

 

You can also submit an appeal to Medicare if Medicare stops paying for any health care services, providers, or prescription drugs. 

 

Assignment

An agreement between your doctor or health care provider that states Medicare will pay for your service and that your doctor or health care provider will not bill you for anything other than your Medicare deductible and/or coinsurance.

B

Beneficiary

You or anyone who receives health care benefits or insurance coverage through Medicare.

Benefit period

If you’re on Original Medicare, this is the time period during which Medicare pays for any health care services you receive at a hospital or a skilled nursing facility (SNF). Your benefit period begins the day you enter the hospital or SNF and ends when you haven’t received care from the hospital or SNF for 60 days in a row. If you receive care at a hospital or SNF after 60 days with no care, a new benefit period begins. There is no limit to how many benefits periods you may have on your coverage.

Benefits

The health care or wellness services, items, and prescription drugs covered by your Medicare plan.

C

Carrier

A private organization or company that contracts with Medicare to help pay for your health care services under Medicare Part B.

Catastrophic coverage (Medicare Part D)

Under your Medicare Part D plan, “catastrophic coverage” indicates when you have paid a set amount of money out of pocket for prescription drugs in a given plan year and now qualify for a lower percentage of the share of costs in addition to your monthly premiums. Your catastrophic coverage period begins after your coverage gap (also known as the Medicare “donut hole”) has been fulfilled and stops at the end of your coverage year, as detailed by your plan.

Centers for Medicare and Medicaid Services (CMS)

The federal government agency that operates and manages the Medicare, Medicaid, and Children’s Health Insurance (CHIP) programs. It also runs the federally administered Marketplace.

Claim

A formal request made by you or a health care provider—on your behalf—asking Medicare to pay for services, medications, equipment, and/or other health-care-related expenses.

Coinsurance

The percentage of your health care claim that you have to pay after you’ve met your deductible and after Medicare pays its portion for drugs or services. For example, if you have a claim for an in-network provider for $2,000, a deductible of $500, and 20 percent coinsurance, then you would pay $500 to cover your deductible and an additional $300 for coinsurance (20 percent of $1,500). Medicare would pay $1,200.

Coordination of benefits

If you have more than one health insurance plan (for example, Medicare and private insurance), coordination of benefits refers to the share of costs each plan will pay for your health care claims. This usually involves designating a primary and a secondary insurance plan in the event you have medical expenses covered by all your insurance plans.

Copayment

Your copayment is the portion of each medical service you pay for doctor’s visits or prescription medications. It’s usually a set amount, such as $20 or $40, as opposed to a percentage (as with coinsurance). As long as your plan covers your doctor, medical service, or prescription drug, Medicare will pay the remaining costs.

Cost sharing

The amount you’ll be expected to pay for health care services. This may include copayments, coinsurance, and/or deductibles.

Coverage determination (Medicare Part D)

In the event you need a specific prescription drug or medication, this is the first decision Medicare makes regarding whether a prescribed drug is covered by your plan, as well as how much you may be expected to pay for it. It may also involve whether or not you qualify for an exception to your plan’s formulary if the prescribed drug is not currently covered by your plan.

Your Medicare Part D plan must inform you promptly about coverage determinations (72 hours for standard requests; 24 hours for expedited requests). If you disagree with the plan’s coverage determination, you may choose to appeal the decision.

Coverage gap (Medicare Part D)

Sometimes called the Medicare “donut hole,” this is the time period during which you may be required to pay a higher share of your prescription drug costs. Your coverage gap begins when you have paid a specific dollar amount for prescription drugs in a given year, set by your Medicare Part D plan and will last until you qualify for “catastrophic coverage.”

Creditable coverage (Medigap)

Any health insurance coverage you may have that can be used to shorten your pre-existing condition waiting period under a Medigap policy.

Creditable prescription drug coverage (Medicare Part D)

Any prescription drug coverage you may already have (such as through an employer or union) that pays, on average, as much as your Medicare Part D plan for prescription drugs and medications. If you have such a plan, you may be able to keep your coverage when you become eligible for Medicare without having to pay a penalty, even if you decide to enroll in a Medicare Part D plan at a later time.

D

 

Deductible 

This is the set amount you must pay on a health insurance claim before your Medicare plan begins to pay. For example, if you have a $500 deductible and a claim of $2,000, you will be required to pay $500 before your Medicare plan will pay the remaining $1,500 (minus coinsurance). 

 

Deemed status

Deemed status is something that a health care provider receives after they have been accredited by a national accreditation program approved by the Centers for Medicare and Medicaid Services (CMS). This status indicates that the provider complies with specific rules and regulations regarding the quality of their services. 

 

Dental coverage

Medicare benefits that include dental services and preventative care, such as cleanings, x-rays, dentures, and fillings. 

 

Department of Health and Human Services (HHS)

The federal government department that oversees and manages the Centers for Medicare and Medicaid Services (CMS), as well as other health care programs and initiatives. 

 

DME Medicare administrative contractor (MAC)

A private company that contracts with Medicare to provide specialized durable medical equipment (DME), such as walkers, wheelchairs, prosthetics, or orthotics. 

 

Donut hole (Medicare Part D)

See “Coverage gap.”

 

Drug list

See “Formulary.”

 

Durable medical equipment (DME)

Medical equipment that your doctor orders for use at home. This may include things like hospital beds, wheelchairs, or walkers.

 

Durable medical equipment regional carrier (DMERC)

A private company that contracts with Medicare to process claims and payments for durable medical equipment (DME) in a specific location or geographic area of the United States. DMERCs also administer policy regarding speech-generating devices (SGDs).

 

E

 

Election

“Election” or “elections” in Medicare refer to any decisions you make regarding coverage. This may include enrolling in or un-enrolling from a Medicare plan, designating beneficiaries, or making changes to your personal information.

 

End-stage renal disease (ESRD)

Also known as permanent kidney failure, end-stage renal disease (ESRD) is a severe kidney condition that is usually caused by high blood pressure or diabetes. ESRD is typically fatal to patients unless they receive consistent kidney dialysis treatments or a kidney transplant. If you are under the age of 65 and suffer from ESRD, you may be eligible for Medicare.

 

Exception (Medicare Part D)

A decision made by your Medicare Part D plan to include a prescription drug that is not currently covered or listed in your formulary or to lower the price of a drug that is covered or listed in your formulary. This decision comes after you make a formal request in writing that Medicare make an “exception” to your current Part D coverage, usually accompanied by supporting medical documentation from your physician prescribing you a specific medication that explains why you need it.

 

Excess charge(s)

If you are on Original Medicare, an excess charge is any health care charge over and above the amount that Medicare pays for. 

 

Expedited organization determination (Medicare Part C)

If you are on a Medicare Advantage (Part C) plan, an expedited organization determination is a decision taken by Medicare regarding whether a specific health service or product will be covered. If your life, health, or ability to regain proper function are at risk, such determinations can be made on an expedited basis (within 72 hours).

 

Extra help (Medicare Part D)

If you have Medicare Part D (prescription drug) coverage and you have a low income, you may qualify for an “extra help” or “limited extra help” program. This program helps pay for some of your prescription drug and medication coverage costs, such as premiums, deductibles, and coinsurance.

F

 

Federally qualified health center

A nonprofit health care facility, such as a clinic, that is federally funded, offers primary care services, and serves mainly underserved or lower-income areas. These centers help provide health care services even if you can’t afford them, and they bill you at a rate that you can reasonably pay. 

 

Fiscal intermediary

Sometimes referred to simply as an “intermediary,” fiscal intermediaries are private organizations that contract with Medicare to process Medicare Part A claims and some Medicare Part B claims.

 

Formulary

Also called an “approved drug list” or simply “drug list,” your formulary details the prescription drugs and medications that are covered by your Medicare Part D plan. It’s usually divided into different levels, called “tiers,” based on the drugs’ cost and the portion of costs you may be expected to pay for each drug as part of your plan. 

 

G

 

General Enrollment Period (GEP)

If you missed your Initial Enrollment Period (IEP) and you were not automatically enrolled in Medicare the General Enrollment Period (GEP) allows you to enroll in Medicare Part A and/or Part B benefits. GEP runs each year from January 1 through March 31. Keep in mind: if you enroll in Medicare during GEP, your coverage will not begin until July of the same year.

 

Generic drug (Medicare Part D)

A prescription drug or medication that Medicare certified by the Food and Drug Administration (FDA) to have the same active ingredient as a brand-name drug. Generic drugs are typically identical to brand-name drugs in terms of dosage, strength, and safety, but they usually cost less. 

 

Grievance

A complaint that you file with Medicare regarding an unsatisfactory health care service, plan, or prescription medication that you have received. If you have a grievance with Medicare or your Medicare plan (or with a service or drug you’ve received through your plan), you must file it in written or oral form within 60 days of the incident. If, however, you have a complaint about a service or drug that is not covered by your Medicare plan, you must file an appeal instead of a grievance. 

 

Group health plan

Generally speaking, this is a health insurance plan offered by an employer or union through a private insurance company to employees and their families. If you’re eligible for Medicare, a group health plan may serve as your primary or secondary health insurance, depending on your employment status. 

 

Guaranteed issue rights (Medigap)

Sometimes called “Medigap protections,” these are basic rights that you have to purchase a Medigap policy. In other words, an insurance company can’t deny you a Medigap policy if you are eligible for one. It also can’t place special conditions or stipulations on your Medigap plan, such as an exclusion for pre-existing conditions or charging you extra fees due to current or past health issues you may have. 

 

Guaranteed renewable policy

A health insurance policy that automatically renews each year unless you fail to pay your premiums, commit fraud, or make false claims or statements to your insurance company. All Medigap policies are guaranteed renewable since 1992. 

 

Remember: if you need extra help deciding which plan you should enroll in, you can always talk to a licensed Medicare agent for free, with no commitment required on your part. Just call 833-716-0673 today for help.

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