A
Annual Enrollment Period (AEP)
The yearly period (October 15 - December 7) when Medicare beneficiaries can make changes to their Medicare coverage, including switching between Original Medicare and Medicare Advantage, or changing Part D plans.
Example:
During the 2025 Annual Enrollment Period, Sarah can switch from her current Medicare Advantage plan to Original Medicare plus a standalone Part D plan.
Assignment
An agreement where healthcare providers accept Medicare's approved amount as full payment for covered services. Providers who accept assignment cannot charge more than Medicare's approved amount.
Example:
If your doctor accepts assignment and Medicare approves $100 for a service, you'll pay the standard 20% coinsurance ($20), and the doctor cannot charge you more than the approved amount.
Appeal
The process of asking Medicare, your Medicare plan, or Medicare Administrative Contractor to review a decision about your health care coverage or payment. You have the right to appeal if you disagree with a decision.
B
Beneficiary
A person who receives Medicare benefits. To be a Medicare beneficiary, you must be 65 or older, have certain disabilities, or have End-Stage Renal Disease (ESRD).
Benefit Period
For Medicare Part A, the period that begins when you're admitted to a hospital or skilled nursing facility and ends when you haven't received inpatient care for 60 consecutive days.
Example:
If you're hospitalized for 5 days, then go home for 70 days, and then return to the hospital, this would be considered two separate benefit periods.
C
Coinsurance
The percentage of the Medicare-approved amount you pay for covered services after you meet your deductible. For Medicare Part B, you typically pay 20% coinsurance.
Example:
If Medicare approves $100 for a doctor visit and you've met your deductible, you'll pay $20 (20% coinsurance) and Medicare pays $80.
Copayment (Copay)
A fixed amount you pay for covered healthcare services, usually at the time you receive the service. Common in Medicare Advantage plans.
Example:
Your Medicare Advantage plan might require a $25 copay for primary care doctor visits, regardless of the total cost of the visit.
Coverage Gap (Donut Hole)
The temporary limit on what Medicare Part D prescription drug plans will cover. In 2025, you enter the coverage gap when your total drug costs reach $5,030, and you pay 25% of drug costs until you reach catastrophic coverage.
D
Deductible
The amount you must pay for healthcare services before Medicare or your Medicare plan begins to pay. In 2025, the Medicare Part B deductible is $240.
Durable Medical Equipment (DME)
Medical equipment that serves a medical purpose, can withstand repeated use, and is appropriate for use in the home. Examples include wheelchairs, hospital beds, and oxygen equipment.
E
Enrollment Period
Specific times when you can sign up for Medicare or make changes to your coverage. Includes Initial Enrollment Period, General Enrollment Period, Annual Open Enrollment, and Special Enrollment Periods.
Explanation of Benefits (EOB)
A statement showing what Medicare paid for your healthcare services and what you may owe. It's not a bill, but helps you understand your coverage and costs.
F
Formulary
A list of prescription drugs covered by your Medicare Part D plan or Medicare Advantage plan. Drugs are typically organized into tiers with different cost-sharing amounts.
Example:
Tier 1 drugs (generics) might have a $5 copay, while Tier 4 drugs (specialty medications) might have 25% coinsurance.
G
General Enrollment Period
The yearly period (January 1 - March 31) when people who missed their Initial Enrollment Period can sign up for Medicare Part A and/or Part B, with coverage beginning July 1.
H
Health Maintenance Organization (HMO)
A type of Medicare Advantage plan that typically requires you to use doctors and hospitals within the plan's network and get referrals from your primary care doctor to see specialists.
I
Initial Enrollment Period (IEP)
The 7-month period when you first become eligible for Medicare, typically around your 65th birthday. Includes 3 months before, the month of, and 3 months after your 65th birthday.
L
Late Enrollment Penalty
A permanent increase in your Medicare premiums if you don't enroll when first eligible. Part B penalty is 10% per year delayed, Part D penalty is 1% of the national base premium per month without coverage.
Example:
If you delay Medicare Part B enrollment for 2 years, you'll pay 20% more in premiums for as long as you have Medicare Part B.
M
Medicare Advantage (Part C)
A way to get Medicare benefits through private health plans approved by Medicare. These plans include everything in Original Medicare (Parts A and B) and often include prescription drug coverage (Part D).
Medicare Supplement (Medigap)
Private insurance that helps pay costs not covered by Original Medicare, such as deductibles, coinsurance, and copays. Sold by private companies and regulated by federal and state law.
Medicare Part A
Hospital insurance that covers inpatient hospital care, skilled nursing facility care, hospice care, and some home health care. Most people get Part A premium-free.
Medicare Part B
Medical insurance that covers medically necessary services like doctor visits, outpatient care, medical supplies, and preventive services. Most people pay a monthly premium for Part B.
Medicare Part D
Prescription drug coverage offered through private insurance companies approved by Medicare. Helps cover the cost of prescription medications.
N
Network
The facilities, providers, and suppliers your health insurer or plan has contracted with to provide healthcare services. Using in-network providers typically costs less.
O
Original Medicare
The traditional fee-for-service Medicare program run directly by the federal government. Includes Medicare Part A (hospital insurance) and Part B (medical insurance).
Out-of-Pocket Maximum
The most you have to pay for covered services in a calendar year. Medicare Advantage plans have out-of-pocket maximums, but Original Medicare does not.
P
Preferred Provider Organization (PPO)
A type of Medicare Advantage plan that allows you to use any provider that accepts Medicare, but you'll pay less if you use providers in the plan's network.
Premium
The amount you pay monthly for your Medicare coverage. Most people don't pay a premium for Part A, but pay monthly premiums for Parts B, C, and D.
Prior Authorization
A requirement that your doctor get approval from your Medicare plan before prescribing certain medications or ordering certain services to ensure they're covered.
Q
Qualifying Event
A life change that allows you to enroll in or change your Medicare coverage outside of the regular enrollment periods. Examples include moving, losing employer coverage, or gaining Medicaid.
R
Referral
Authorization from your primary care doctor to see a specialist or receive certain medical services. Required by some Medicare Advantage plans, particularly HMOs.
S
Special Enrollment Period (SEP)
A time outside the regular enrollment periods when you can sign up for Medicare or change your coverage due to certain qualifying life events.
Supplemental Benefits
Extra benefits that Medicare Advantage plans may offer beyond Original Medicare, such as dental, vision, hearing aids, transportation, or wellness programs.
T
Tier
A level in Medicare Part D formularies that determines how much you pay for prescription drugs. Tier 1 (generic) drugs typically cost less than Tier 4 (specialty) drugs.
U
Urgent Care
Care for medical conditions that need immediate attention but aren't life-threatening emergencies. Medicare covers urgent care services.