Click on a term to jump to its definition.
Acute Illness:A disease or condition that comes on rapidly and severely, but that can-with proper treatment-be cured, such as pneumonia or a broken bone.
Advance Beneficiary Notice (ABN):A notice health care providers and suppliers are required to give a person with Original Medicare when they believe that Medicare will not cover their services or items and the person has no reason to know that Medicare will not cover the items or services. If your provider does not give you an ABN to sign and you have no reason to know the procedure is not covered, then you do not have to pay. If you sign an ABN before you get the service or item, and Medicare does not pay for it, you generally pay for it, although there are a few exceptions. Providers are not required to give you an ABN for services or items Medicare never covers.
Advance Directive:A legal document that outlines how you want medical decisions made if you lose the ability to make decisions for yourself. A health care advance directive may include a living will and a power of attorney for health care decisions.
ALS/Lou Gehrig's Disease:A disease that affects the motor nerve cells of the spinal cord and causes their degeneration. Patients with this disease can qualify for Medicare coverage regardless of age.
Annual Coordinated Election Period (ACEP):The period of time between November 15 and December 31 of every year when you can change your Medicare private drug plan and/or your Medicare health plan choice for the following year. This is also the time you can enroll in the Medicare prescription drug benefit (Part D) if you do not enroll during your Initial Enrollment Period (you may have to pay a premium penalty if you enroll during this time unless you had drug coverage from another source that was at least as good as Medicare's and you were not without that coverage for more than 63 days). Your new coverage will begin January 1.
Appeal:A special kind of complaint that you make to your private Medicare plan or Original Medicare when you disagree with a decision it has made about your health care. For example, you might appeal if your health plan doesn't pay for care you need.
Approved Amount:The fee that Medicare sets as its rate for a medical service. Medicare will cover 80 percent of this amount (or 50 percent for mental health services) and you (or your supplemental insurance) are responsible for the remainder. All doctors and other providers who take assignment must accept this approved amount as full payment, even if they normally charge more for the service.
Assignment:A Medicare term used to describe an agreement by a doctor to accept Medicare's approved amount as payment in full. Any doctor who is a "participating provider" in the Medicare program always takes assignment. Participating providers may not charge you more than Medicare's approved amount. If you have Original Medicare, it can save you money to see a doctor who takes assignment.
Assistive Technology:Any item, piece of equipment or system that is used to increase, maintain or improve the functional capabilities of individuals with disabilities. For example, Closed Circuit Television is an assistive technology, which Medicare will cover if medically necessary. Simple items like "grabbers" and "reachers" are not covered by Medicare.
Beneficiary:A person over 65 or under 65 with Social Security Disability Insurance who receives health insurance through the Medicare program.
Certificate of Medical Necessity (CMN):Documentation from a doctor which Medicare requires before it will cover certain durable medical equipment. The CMN states the patient's diagnosis, prognosis, reason for the equipment, and estimated duration of need.
Chronic Illness:A disease or condition that lasts for a long period of time or is marked by frequent recurrence, such as diabetes or asthma.
Claim:A bill that asks for payment for services or benefits you received. Medicare Part A claims are processed by Fiscal Intermediaries and Part B claims are processed by Medicare Carriers.
COBRA:A federal law guaranteeing employees and their families at risk of losing health coverage-due to termination of employment, death, divorce, or other circumstances-the right to purchase continued coverage under the employer's group health plan for limited periods of time.
Coinsurance:The portion of the cost of care you are required to pay after your health plan pays. Usually, it is a percentage of an approved amount. In Original Medicare the coinsurance is usually 20% of the Medicare-approved amount.
Coordination of Benefits:The sharing of costs by two or more health plans, based on their respective financial responsibilities for medical claims. Your primary insurance and secondary insurance must coordinate benefits in order to pay claims.
Copayment:A set amount you are required to pay for each medical service you receive, such as a visit you make to a health care provider. It usually ranges from $5 to $25.
Coordination Period:For people with end-stage renal disease, the period of time during which an employer group health plan pays first and Medicare pays second. Medicare may pay the remaining costs if your group health plan doesn't pay 100 percent of your health care bills during the coordination period.
Cost Sharing:The portion of medical care that you pay yourself, such as a copayment, coinsurance or deductible.
Cost Tiers:A system that drug plans use to price medications. Generic drugs are generally on the first, and least expensive tier, followed by brand-name drugs, and then specialty drugs, with each subsequent tier requiring higher out-of-pocket costs.
1. Any health insurance coverage you had within 63 days of securing a new insurance policy that can be used to shorten the waiting period for pre-existing conditions.
2. Prescription drug coverage that is considered to be as good as or better than the Medicare prescription drug benefit in monetary value.
Curative Care:The treatment of patients with the intent of curing their disease or condition; for example, chemotherapy treatments to cure breast cancer.
Currently Working:You are considered to be "currently working" as long as you have employment rights at your company, even if you do not work on a regular basis, are on sick leave, are a seasonal worker, or have been temporarily laid-off. You are not considered to be "currently working" if you receive Social Security Disability Insurance (SSDI), have received disability benefits from your employer for more than six months, or if you receive your employer insurance through COBRA.
Deductible:The amount of health care expenses you must pay before your health plan or Medicare begins to pay. These amounts can change every year.
Denial of Coverage:A refusal by Medicare or a private plan to pay for medical services that are not covered under its policy.
Department of Veterans Affairs (VA):A government agency that provides federal benefits to veterans and their families. These benefits include pensions, educational stipends and health care services, among others. (See also VA Benefits.)
Disenrollment:Leaving a health plan like an HMO.
Durable Medical Equipment (DME):Equipment that is primarily serving a medical purpose, is able to withstand repeated use, and is appropriate for use in the home; for example, wheelchairs, oxygen equipment and hospital beds. To be covered by Medicare, durable medical equipment must be prescribed by a doctor. Many types of adaptive equipment are not covered.
Doughnut Hole:Also called a "Coverage Gap." A gap in insurance coverage during which you must pay all drug costs in full; often followed by "catastrophic coverage" from the insurance plan.
Drug Class:A group of drugs that treat the same symptoms or have similar effects on the body. For example, people with Medicare often use statin class drugs, which are used for reducing cholesterol. Drugs in this class include (but are not limited to) Lipitor, Zocor, Pravachol, Zetia, and Vytorin.
Dual Eligible:A person who has both Medicare and Medicaid.
Earned Income:Money you get because you work, such as wages from work and earnings from self-employment.
Election Periods:The times when a Medicare-eligible person can choose to join or leave Original Medicare or a Medicare Advantage plan. There are four types of election periods: the annual election period, the initial election period, the special election period, and the open enrollment period.
Enrollment:Joining Original Medicare or becoming a member of a private health plan, like a Medicare HMO.
Explanation of Medicare Benefits (EOMB):The notice you get from Medicare after receiving medical services from a doctor, hospital or other health care provider. It tells you what the provider billed Medicare, Medicare's approved amount, the amount Medicare paid, and what you have to pay. It is not a bill. (See also Medicare Summary Notice (MSN).)
End-Stage Renal Disease (ESRD):Kidney failure that requires you to be on dialysis or have a kidney transplant.
Excess Charges:The difference between a doctor's or other health care provider's actual charge and the Medicare-approved payment amount.
Extra Help:A Federal program that is administered by Social Security that helps people with Medicare who have low incomes and assets pay for their Medicare drug coverage (including coinsurance, deductibles, and premiums). If you have Medicaid, receive Supplemental Security Income (SSI), or are enrolled in a Medicare Savings Program (MSP), then you are automatically eligible for Extra Help.
Expedited Appeal:A fast appeal of a denial of health care services made by a Medicare private plan (HMO, PPO, PFFS) when a person's "life, health, or ability to regain maximum function" is in jeopardy. These appeals generally take 72 hours.
Fee-for-Service:Payment to providers for each service they provide, as in Original Medicare.
Formulary:The list of prescription drugs that your private health plan, like a Medicare HMO, will pay for either in part or in full. Drugs not on the formulary are generally not covered by private health plans.
Gaps in Coverage:Services or costs that are not covered under the Original Medicare plan, such as prescription drugs, deductibles, and coinsurance.
General Enrollment Period:The time period between January 1 and March 31 of every year when you can enroll in Medicare Part B. If you enroll during this period, your coverage will begin on July 1.
Grievance:A complaint filed with your Medicare health plan about the care you are receiving. For example, you may file a grievance if you are dissatisfied with the condition of a health care facility or if you have a complaint about staff behavior or the facility's operating hours. An appeal, not a grievance, is the appropriate way to complain about a denial of care or coverage.
Health Care Provider:An individual or facility, such as a doctor or hospital, which provides health care services. (See also Provider.)
HIPAA:The Health Insurance Portability and Accountability Act amended the Employee Retirement Income Security Act (ERISA), to provide new rights and protections for members of group health plans. HIPAA contains protections both for health coverage offered in connection with employment (group health plans) and for individual insurance policies sold by insurance companies (individual policies).
HMO (Health Maintenance Organization):A type of managed care plan that generally covers only the care you get from doctors, hospitals, and other health care providers that are in the HMO network. The government pays HMOs a set amount to provide health care to people with Medicare. HMO members must choose a primary care doctor who coordinates their care and decides when they can go to a specialist.
Home Health Agency:An organization that provides home care services, such as skilled nursing care, physical therapy, occupational therapy, speech therapy, and personal care.
Homebound:A person whose condition is such that there exists a normal inability to leave home, and leaving home requires "a considerable and taxing effort. A person does not have to be confined to the bed to be considered homebound by Medicare. Leaving home for short periods of time for special non-medical events, such as a family reunion, funeral or graduation, would not exclude someone from being considered homebound. A doctor must certify this condition.
Home Health Aide:A worker who helps a patient at home with activities of daily living, such as getting in and out of bed, dressing, bathing, eating and using the bathroom. Medicare does not pay separately for aides to perform house-keeping services, such as cooking and cleaning, but they may do light housekeeping related to personal care during the visit. Medicare will not pay for home health aide services unless they are accompanied by a skilled need.
Home Health Care:Care provided at home to treat an illness or injury. Medicare will only cover care in the home if the person has a skilled care need. (See also Skilled Care.)
Hospice:Comprehensive care for people who are terminally ill that includes pain management, counseling, respite care, prescription drugs, inpatient and outpatient services, and services for the terminally ill person's family.
Initial Coverage Election Period:The three months immediately before you are entitled to Medicare Part A and enrolled in Part B. If you choose to join a Medicare health plan during this period, the plan must accept you, unless it has reached its member limit.
Initial Enrollment Period:The first chance you have to enroll in Part A, Part B or Part D if you don't get it automatically. If you enroll during this time, which begins three months before you first meet the eligibility requirements for Medicare and continues for seven months, you do not pay a premium penalty.
Inpatient Care:Care that you get when you are in the hospital overnight.
Lifetime Reserve Days:Also known as "reserve days." When you are in the hospital for more than 90 days, Medicare pays for 60 additional reserve days that you can only use once in your lifetime. They are not renewable once you use them.
Long-Term Care:Custodial care given at home or in a nursing home. Medicare does not cover long-term care.
Long-Term Care Ombudsman:An independent advocate for nursing home and assisted living facility residents who provides information about how to find a facility and how to get quality care. Every state is required to have an Ombudsman Program that addresses complaints and advocates for improvements in the long-term care system.
Maintenance Care:Care given to people with chronic diseases or conditions to keep them from getting worse. For example, exercise and physical therapy can minimize abnormal or painful positioning of the joints and may prevent or delay curvature of the spine in a person with Muscular Dystrophy.
Managed Care Plan:A health plan (like an HMO) run by a private company or entity that receives a set amount of money from the government to provide Medicare-covered benefits.
Medicaid:A state-run program that covers medical expenses for people with low or limited incomes.
Medicaid Spend-Down:A state-run Medicaid program for people whose income is higher than would normally qualify them for Medicaid, but who have high medical expenses that reduce their incomes to the Medicaid eligibility level. Not all states have Medicaid spend-down.
Medical Social Services:A service generally intended to help the patient and family cope with the logistics of daily life with an advanced illness. Medical social services include assessing social and emotional factors related to the patient's illness and care; evaluating the patient's home situation, financial resources, and availability of community resources; and helping the patient access community resources to assist in recovery. The social worker may also provide counseling to the patient and family to address emotions and issues related to the illness.
Medically Necessary:Procedures, services, or equipment that meet good medical standards and are necessary for the diagnosis and treatment of a medical condition.
Medicare-Approved Amount:Also called "Medicare-approved charge." This is the amount Medicare will pay for certain medical services or equipment. Generally you are responsible for paying 20% of the Medicare-approved amount.
Medicare Advantage Plans:Formerly known as Medicare+Choice. Private plans a person with Medicare can join. Many of these private Medicare plans are not yet available in many parts of the country.
Medigap:A Medicare supplemental insurance policy that is sold by private insurance companies to fill "gaps" in Original Medicare. This insurance policy is usually available in the form of ten different plans labeled A through J and only works with Original Medicare.
Medicare Summary Notice (MSN):The notice you get in the mail from Medicare after getting medical services from a doctor, hospital or other health care provider. It tells you what the provider billed Medicare, Medicare's approved amount, the amount Medicare paid, and what you have to pay. The MSN is not a bill. (See also Explanation of Medicare Benefits (EOMB).)
National Coverage Determination (NCD):A decision about particular treatments that Medicare will or will not cover for particular conditions. Medicare contractors are required to follow NCDs.
Occupational Therapy:Therapy that helps patients to resume normal fine-motor activities.
Open Enrollment Period:A certain period of time when you can join a Medicare health plan. During that time, the plan must allow all eligible individuals to join.
Opt Out:Doctors can "opt out" of Medicare by notifying the Medicare carrier that they will not accept Medicare payments and telling their patients-in writing before treating them-that Medicare will not pay for their services and that the patients must pay for the care themselves. Doctors who have "opted out" can charge as much as they want, and their patients have to pay the entire bill themselves. The only time a doctor who has opted out can receive payment from Medicare is when the doctor provides a patient emergency or urgent care services and the patient does not have a contract with that doctor. If the doctor did not provide a written contract before the patient received the services, the patient is not liable for payment.
Original Medicare:Also known as "Traditional Medicare." The federal health insurance program, created in 1965, under which the government pays providers directly for each service a person receives (on a fee-for-service basis). About 89 percent of the Medicare population is enrolled in Original Medicare, as opposed to a private Medicare plan (HMO, PPO).
Out-of-Network Provider:A doctor or hospital that is not part of a managed care plan's network. If you get services from an out-of-network provider, it usually means that you likely will have to pay out of your own pocket for the services you received.
Out-of-Pocket Costs:Health care costs that you must pay because Medicare or other insurance does not cover them.
Outpatient Care:Medical care that does not require you to stay in the hospital overnight.
Part A:The part of Medicare that covers most medically necessary hospital, skilled nursing facility, home health, and hospice care.
Part B:The part of Medicare that covers most medically necessary doctors' services, preventive care, durable medical equipment, hospital outpatient services, laboratory tests, x-rays, mental health, and some home health and ambulance services.
Part C:The part of Medicare concerning private health care plans that can offer Medicare benefits. These plans, which are sometimes known as Medicare Advantage plans, include Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs), Private Fee for Service plans (PFFSs) and Medical Savings Accounts (MSAs). You must have Medicare Parts A and B to join a Part C plan.
Part D:The part of Medicare that will provide prescription drug coverage starting in January 2006. The benefit will be provided by private companies. People who enroll in Part D will pay a monthly premium in addition to their Part B premium.
Participating Provider:A doctor or other health care provider who agrees to "take assignment"-accept Medicare's approved amount as payment in full. Any doctor who is a "participating provider" in the Medicare program always takes assignment. Participating providers may not charge you more than Medicare's approved amount. If you have Original Medicare, you can save money if you see a doctor who takes assignment (you still pay your coinsurance). (See also Take Assignment.)
Personal Care:Assistance with activities of daily living, such as bathing, feeding and toileting. Providers of personal care (home health aides) are not required to undergo medical training.
PCP (Primary Care Physician):The doctor that manages your care and refers you to specialty care if you need it. A managed care plan, like an HMO, requires you to have a PCP. If you don't consult your PCP before seeing a specialist, your managed care plan, will likely not cover your care.
PFFS (Private Fee-for-Service):A plan that allows you to use any doctor or hospital anywhere in the country as long as that provider accepts the plan's terms and conditions. This plan must cover all Medicare benefits and may offer additional benefits. But, you may pay more for Medicare benefits and you cannot buy a Medigap plan to fill gaps in coverage.
Physical Therapy:Exercise and physical activities used to condition muscles and improve levels of activity. Physical therapy is helpful for those with physical debilitating illness.
Plan of Care:A doctor's written plan describing the type and frequency of services and care a particular patient needs.
POS Option (Point-of-Service Option):The right of managed care plan members to partial coverage for certain services they get outside the managed care plan network of providers.
PPO (Preferred Provider Organization):A type of managed care plan that should partially cover the care from out-of-network providers. To get full coverage, you must use network providers.
Pre-Authorization:Also called "pre-approval." An approval that a managed care plan member must ask for from the plan or primary care doctor fin order to know that the plan will pay for certain medical services, such as an inpatient hospital stay. In some plans, of you do not get pre-authorization the plan will not cover the care.
Pre-Existing Condition:A condition or illness you were diagnosed with or got treatment for before your new health care coverage began.
Premium:The amount that an individual who wants health care coverage must pay to an insurer, health plan or Medicare.
Premium Penalty:The amount that you must pay to Medicare in addition to the regular monthly premium for late enrollment. The Part B premium is an additional 10 percent of the premium for each year you delay enrollment. Part D will have a premium penalty of at least 1 percent for every month you delay enrollment.
Prescription Drug Plan (PDP):A "stand-alone" Medicare drug plan offered through a private insurance company that only offers prescription drug benefits for people with Medicare.
Preventive Care:Care to keep you healthy or prevent illness, such as routine checkups and flu shots and tests like prostate cancer screening and yearly mammograms.
Primary Insurance:Health care coverage that pays first on a claim for medical and hospital care. In most cases, Medicare is your primary insurer.
Provider:An individual or facility (such as a doctor, hospital or durable medical equipment supplier), which provides health care services.
Railroad Medicare Carrier:A private company that provides Medicare coverage for railroad retirement beneficiaries.
Referral:Authorization that an HMO and other managed care plans usually require for services not provided your primary care doctor. For instance, HMOs generally require you to get a referral from your primary care doctor in order to see a specialist or get an eye exam.
Rehabilitative Care:The care of patients with the intent of curing, improving or preventing a worsening of their condition. For example, physical therapy after hip replacement surgery to resume walking, or occupational therapy to prevent carpal tunnel syndrome.
Respite Care:A hospice service that provides relief for caregivers of hospice patients by arranging a brief period (up to five days) of inpatient care for the patient.
Retiree Insurance:Health insurance provided by employers to former employees who have retired. Retiree insurance always pays secondary to (after) Medicare.
Retroactive Disenrollment:A way to discontinue enrollment in a Medicare private plan that you mistakenly joined, effective back to the date you joined, and enroll in Original Medicare as of that date. Your providers will need to resubmit any claims from the time you joined the Medicare private plan to Original Medicare.
Secondary Insurance:Health care coverage that pays after the primary insurer on a claim for medical or hospital care. It usually pays for all or some of the costs that the primary insurer did not cover, but may not cover services not covered by the primary insurer.
Service Area:The area within which a private Medicare plan provides medical services to its members. In an HMO, it is the area where your network of doctors and hospitals is located.
Skilled Care:Medically reasonable and necessary care performed by a skilled nurse or therapist. If a home health aide (someone who provides help with daily living activities, such as bathing and eating) or other person can perform the service, it is not considered "skilled care." Skilled nursing includes care from Registered Nurses (RNs) and Licensed Practical Nurses (LPNs). Skilled therapy includes care from licensed physical, occupational and speech therapists.
Skilled Nursing Facility (SNF):A Medicare-approved facility which provides short-term post-hospital extended care services, at a lower level of care than provided in a hospital.
Skilled Nursing Services:Services from a registered nurse, which include administration of medications; tube feedings; catheter changes; wound care; teaching and training activities; observation and assessment of a patient's condition; and management and evaluation of a patient's care plan.
Skilled Therapy Services:Services from licensed physical, speech/language, and occupational therapists (if originally accompanied by physical or speech therapy services). Physical therapy services which qualify people for home health care include: assessment; therapeutic exercises; gait training; range of motion tests; ultrasound, shortwave, and microwave diathermy treatments; teaching services; and development, implementation, management, and evaluation of a patient care plan. Maintenance therapy is covered if a physical therapist's skills are necessary for the safe and effective provision of repetitive services which use complex, sophisticated procedures.
Special Election Period:A set time when you can switch to another Medicare private health plan, if one is available. During this time, Medicare private plans must enroll individuals who apply whose private plans are closing.
Special Enrollment Period (SEP):A period of time, triggered by specific circumstances, during which you can enroll in Medicare Part B or Part D without having to pay a premium penalty. Under Part B, your SEP begins the month after employment or group health coverage ends (whichever comes first). Under Part D, you are eligible for an SEP if you lose-through no fault of your own-any type of drug coverage that was considered "creditable".
SSI (Supplementary Security Income):Monthly benefits for people with low incomes and assets who are older than 65, blind, or have a disability.
Supplemental Insurance:Supplemental insurance fills gaps in Medicare coverage by helping to pay for the portion of health care expenses that Original Medicare does not pay for, such as deductibles and coinsurance. Supplemental insurance includes Medigap plans and retiree insurance from a former employer. Supplemental insurance may offer additional benefits that Medicare does not cover.
Supplier:A person or business from whom you can buy medical equipment, like a walker or wheelchair.
Take Assignment:A term used to describe an agreement by a doctor to accept Medicare's approved amount as payment in full. Any doctor who is a "participating provider" in the Medicare program always takes assignment. Participating providers may not charge you more than Medicare's approved amount. If you have Original Medicare, it can save you money to see a doctor who takes assignment. But, you still pay your coinsurance (or share) of the cost of the doctor visit, usually 80 percent of the Medicare-approved amount. (See also Participating Provider.)
TRICARE:The Department of Defense's health care program for active duty and retired military personnel and their family members. TRICARE consists of several different programs, including TRICARE for Life, a retiree benefit that acts as supplemental coverage to Medicare. TRICARE also offers coverage to reserve force members who are on active duty for 30 days or more.
TRICARE for Life:The health care program for military retirees who have served honorably for at least 20 years. They must be enrolled in Part B to receive the benefits. It pays secondary to Medicare and covers out-of-pocket expenses including deductibles and coinsurance. People who qualify can receive free or low-cost medications from military treatment facilities, TRICARE network and non-network pharmacies, and the National Mail Order Pharmacy.
Unearned income:Money you get from sources other than current employment. Includes Social Security benefits, Veterans benefits, pensions, annuities and other regular payments you receive, such as alimony and workers' compensation.
Urgent Care:A sudden illness or injury that needs immediate medical attention but is not life threatening.
Veterans Administration (VA) Benefits:Benefits given by the federal government to people who have been in "active" service in the military, naval, or air service (veterans, not career officials) and, under certain conditions, to their family members. These benefits include pensions, educational stipends and health care, among others. Veterans can receive VA health care services only at VA facilities. (See also Department of Veteran's Affairs.)
Waiting Period:The time between when you sign up for a Medigap or private Medicare health plan and the coverage begins.