Medicare Glossary
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Benefit Period - The way that Original Medicare measures your use of hospital and skilled nursing facility (SNF) services. A benefit period begins the day you go to a hospital or skilled nursing facility. The benefit period ends when you haven’t received any inpatient hospital care (or skilled care in a SNF) for 60 days in a row. If you go into a hospital or a skilled nursing facility after one benefit period has ended, a new benefit period begins.
Coinsurance - An amount you may be required to pay as your share of the costs for services, aft er you pay any plan deductibles. Coinsurance is usually a percentage (for example, 20%).
Copayment - An amount you may be required to pay as your share of the cost for a medical service or supply, like a doctor’s visit or a prescription. A copayment is usually a set amount, rather than a percentage. For example, you might pay $10 or $20 for a doctor’s visit or prescription.
Deductible - The amount you must pay for health care or prescriptions, before Original Medicare, your prescription drug plan, or other insurance begins to pay.
Excess Charges - If you have Original Medicare, and the amount a doctor or other health care provider is legally permitted to charge is higher than the Medicare-approved amount, the diff erence is called the excess charge.
Guaranteed Issue Rights (also called "Medigap Protections") - Rights you have in certain situations when insurance companies are required by law to sell or off er you a Medigap policy. In these situations, an insurance company can’t deny you a Medigap policy, or place conditions on a Medigap policy, such as exclusions for pre-existing conditions, and can’t charge you more for a Medigap policy because of past or present health problems.
Guaranteed Renewable - An insurance policy that can’t be terminated by the insurance company unless you make untrue statements to the insurance company, commit fraud, or don’t pay your premiums. All Medigap policies issued since 1992 are guaranteed renewable.
Health Maintenance Organization (HMO) Plan (Medicare) - A type of Medicare Advantage Plan (Part C) available in some areas of the country. In most HMOs, you can only go to doctors, specialists, or hospitals on the plan’s list except in an emergency. Most HMOs also require you to get a referral from your primary care doctor.
Lifetime Reserve Days - In Original Medicare, these are additional days that Medicare will pay for when you are in a hospital for more than 90 days. You have a total of 60 reserve days that can be used during your lifetime. For each lifetime reserve day, Medicare pays all covered costs except for a daily coinsurance ($534 in 2009).
Medicaid - A joint Federal and state program that helps with medical costs for some people with limited incomes and resources. Medicaid programs vary from state to state, but most health care costs are covered if you qualify for both Medicare and Medicaid.
Medical Savings Account (MSA) Plan - MSA Plans combine a high deductible Medicare Advantage Plan and a bank account. The plan deposits money from Medicare into the account. You can use the money in this account to pay for your health care costs, but only Medicare-covered expenses count toward your deductible. The amount deposited is usually less than your deductible amount so you generally will have to pay out-of-pocket before your coverage begins.
Medical Underwriting - The process that an insurance company uses to decide, based on your medical history, whether or not to take 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 (Part C) - A type of Medicare health 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 include Health Maintenance Organizations, Preferred Provider Organizations, Private Fee-for-Service Plans, Special Needs Plans, and Medicare Medical Savings Account Plans. If you are enrolled in a Medicare Advantage Plan, Medicare services are covered through the plan and aren’t paid for under Original Medicare. Most Medicare Advantage Plans offer prescription drug coverage.
Medicare-Approved Amount - In Original Medicare, this is the amount a doctor or supplier that accepts assignment can be paid. It includes what Medicare pays and any deductible, coinsurance, or copayment that you pay. It may be less than the actual amount a doctor or supplier charges.
Medicare Cost Plan - A type of Medicare health plan. In a Medicare Cost Plan, if you get services outside of the plan’s network without a referral, your Medicare-covered services will be paid for under Original Medicare. Your Cost Plan pays for emergency services, or urgently needed services.
Medicare Prescription Drug Plan (Part D) - A stand-alone drug plan that adds prescription drug coverage to Original Medicare, some Medicare Cost Plans, some Medicare Private- Fee-for-Service Plans, and Medicare Medical Savings Account Plans. If you have a Medigap policy without prescription drug coverage, you can also add a Medicare Prescription Drug Plan. These plans are offered by insurance companies and other private companies approved by Medicare. Medicare Advantage Plans may also offer prescription drug coverage that follows the same rules as Medicare Prescription Drug Plans.
Medicare SELECT - A type of Medigap policy that may require you to use hospitals and, in some cases, doctors within its network to be eligible for full benefits.
Open Enrollment Period (Medigap) - A one-time-only, 6-month period when Federal law allows you to 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 a Medigap policy or charged more due to past or present health problems. Some states may have additional open enrollment rights under state law.
Original Medicare - Original Medicare is fee-for-service coverage under which the government pays your health care providers directly for your Part A and/or Part B benefits.
Pre-existing Condition - A health problem you had before the date that a new insurance policy starts.
Preferred Provider Organization (PPO) Plan - A type of Medicare Advantage Plan (Part C) available in some areas of the country in which you pay less if you use doctors, hospitals, and other health care providers that belong to the plan’s network. You can use doctors, hospitals, and providers outside of the network for an additional cost.
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 (PFFS) Plan - A type of Medicare Advantage Plan (Part C) in which you can generally go to any doctor or hospital you could go to if you had Original Medicare, if the doctor or hospital agrees to treat you. The plan determines how much it will pay doctors and hospitals, and how much you must pay when you receive care. A Private Fee-for-Service Plan is very different than Original Medicare, and you must follow the plan rules carefully when you go for health care services. When you’re in a Private Fee-for-Service Plan, you may pay more, or less, for Medicare-covered benefits than in Original Medicare.
Special Needs Plans - A special type of Medicare Advantage Plan (Part C) that provides more focused and specialized health care for specific groups of people, such as those who have both Medicare and Medicaid, who reside in a nursing home, or have certain chronic medical conditions.
State Health Insurance Assistance Program (SHIP) - A state program that gets money from the Federal government to give free local health insurance counseling to people with Medicare.
State Insurance Department- A state agency that regulates insurance and can provide information about Medigap policies and other private insurance.
Source CMS publication #02110, Choosing a Medigap Policy: A Guide to Health Insurance for People With Medicare, available online at: http://www.medicare.gov/Publications/Pubs/pdf/02110.pdf