Terms/Glossary
Assignment
An agreement by your doctor, other health care provider, or supplier to be paid directly by Medicare, to accept the payment amount Medicare approves for the service, and not to bill you for any more than the Medicare deductible and coinsurance.
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’re admitted as an inpatient in 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. You must pay the inpatient hospital deductible for each benefit period. There’s no limit to the number of benefit periods.
Coinsurance
An amount you may be required to pay as your share of the cost for services after you pay any 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, hospital outpatient visit, or 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.
Coverage Gap
Most Medicare drug plans have a coverage gap (also called the “donut hole.”) This means that there’s a temporary limit on what the drug plan will cover for drugs. The coverage gap begins after you and your drug plan have spent a certain amount for covered drugs. Not everyone will enter the coverage gap.
Creditable Prescription Drug Coverage
Prescription drug coverage (for example, from an employer or union) that’s expected to pay, on average, at least as much as Medicare’s standard prescription drug coverage. People who have this kind of coverage when they become eligible for Medicare can generally keep that coverage without paying a penalty, if they decide to enroll in Medicare prescription drug coverage later.
Deductible
The amount you must pay for health care or prescriptions before Original Medicare, you prescription drug plan, or your other insurance begins to pay.
Extra Help
A Medicare program to help people with limited income and resources pay Medicare prescription drug plan costs, such as premiums, deductibles, and coinsurance.
Formulary
A list of prescription drugs covered by a prescription drug plan or another insurance plan offering prescription drug benefits.
Health Maintenance Organization (HMO) Plans
In most HMOs, you can only go to doctors, other health care providers, or hospitals in the plan’s network except in an emergency. You may also need to get a referral from your primary care doctor.
HMO Point-of-Service (HMOPOS) Plans
These are HMO plans that may allow you to get some services out of network for a higher copayment or coinsurance.
Late Enrollment Penalty
The late enrollment penalty is an amount that’s added to your Part D premium. You may owe a late enrollment penalty if at any time after your initial enrollment period is over, there’s a period of 63 or more days in a row when you don’t have Part D or other creditable prescription drug coverage. Note: If you get Extra Help, you don’t pay a late enrollment penalty.
Long-Term Care
A variety or services that help people with their medical and non-medical needs over a period of time. Long-term care can be provided at home, in the community, or in various other 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.
Medically Necessary
Services or supplies that are needed for the diagnosis or treatment of your medical condition and meet accepted standards of medical practice.
Medicare Advantage
A Medicare Advantage Plan (like an HMO or PPO) is another Medicare health plan choice you may have as part of Medicare. Medicare Advantage Plans, sometimes called “Part C” or “MA Plans,” are offered by private companies approved by Medicare. You’ll get your Part A (Hospital Insurance) and Part B (Medical Insurance) coverage from the Medicare Advantage Plan, not Original Medicare.
Medicare-Approved Amount
In Original Medicare, this is the amount of doctor or supplier that accepts assignment can be paid. It may be less than the actual amount a doctor or supplier charges. Medicare pays part of this amount and you’re responsible for the difference.
Medicare Supplement Insurance (Medigap)
Original Medicare pays for many, but not all, health care services and supplies. A Medicare Supplemental Insurance policy, sold by private companies, can help pay for some of the health care costs that Original Medicare doesn’t cover, like copayments, coinsurance, and deductibles. Medicare Supplement Insurance policies are also called Medigap policies.
Preferred Provider Organization (PPO) Plans
In a PPO, you pay less if you use doctors, hospitals, and other health care providers that belong to the plan’s network. You usually pay more if you use doctors, hospitals, and providers outside of the network.
Premium
The periodic payment to Medicare, an insurance company, or a health care plan for health or prescription drug coverage.
Prescription Drug Coverage
Medicare offers prescription drug coverage to everyone with Medicare. Even if you don’t take many prescriptions now, you should consider joining a Medicare drug plan. If you decide not to join a Medicare drug plan when you’re first eligible, and you don’t have other creditable prescription drug coverage, or you don’t get Extra Help you’ll likely pay a late enrollment penalty if you join a plan later. These plans are available through private companies under contract with Medicare.
Preventive Services
Health care to prevent illness or detect illness at an early stage, when treatment is likely to work best (for example, preventive services include Pap tests, flu shots, and screening mammograms).
Special Needs Plans (SNP)
SNPs provide focused and specialized health care for specific groups of people, like those who have both Medicare and Medicaid, who live in a nursing home, or have certain chronic medical conditions.
Cowles Insurance Services is a leading-edge health insurance agency specializing in helping people find the right healthcare plans for their medical needs. We are licensed health insurance agents authorized to market Medicare plans. Neither Cowles Insurance Services nor its agents are connected with the Federal Medicare program. This is an advertisement for insurance. We do not offer every plan available in your area. Currently we represent 11 organizations which offer 99 products in your area. Please contact Medicare.gov, 1-800-MEDICARE, or your local State Health Insurance Program (SHIP) to get information on all of your options.
