There’s no denying it: Medicare is confusing! We’re here to help. We’re committed to helping you understand the Medicare enrollment process and choose the right coverage for your needs.
Below is a list of important Medicare terms that can help you make an informed decision when you choose your coverage.
Annual Enrollment Period (AEP) (also known as Annual Election Period): The period when you can enroll or switch to the Medicare Advantage plan of your choice. Your coverage will start on January 1 of the following year. The AEP for Medicare lasts from October 15 to December 7 every year.
Coinsurance: Co-insurance is when you and your health plan share the cost of a service you receive. You may be required to pay co-insurance after you pay any deductibles you may be responsible for. Co-insurance is a percentage of a cost (for example, 20%).
Copayment: An amount you may be required to pay as your share of the cost for a medical service or supply, such as a doctor’s visit, hospital outpatient visit, or prescription drug. It’s a set amount, not a percentage. For example, you might pay $10 or $20 for a doctor’s visit or prescription drugs.
Coverage Gap: The period of time when you pay a higher cost-sharing amount for prescription drugs. The coverage gap lasts until you spend enough to qualify for catastrophic coverage. This time period starts when you and your plan have paid a set dollar amount for prescription drugs within 1 year.
Deductible: The out-of-pocket amount you must pay before coverage with Original Medicare, or another health plan, begins. Health insurance plans can include deductibles for both medical and prescription-drug benefits.
Dual Eligible Special Needs Plan (D-SNP): A special type of Medicare Advantage plan that provides health benefits for people who are “dually eligible.” This term means they qualify for both Medicare and Medicaid.
Extra Help: A program that helps people with limited income and resources. This program helps them pay Medicare prescription drug–program costs, premiums, deductibles, and co-insurance. Learn more about the Extra Help program.
Formulary: A list of covered prescription drugs that an insurance plan offers. A formulary is also called a drug list.
Generic Drug: Generic drugs are alternatives to brand-name drugs. Generic drugs have the same dosage, intended use, effects, side effects, route of administration, risks, safety, and strength as the brand-name drug.
Health Maintenance Organization (HMO): A type of managed health plan that provides coverage through a network of physicians. Care received from an out-of-network provider is typically not covered, except if you need emergency or urgent care.
Initial Enrollment Period (IEP): The IEP is time when you can first sign up for Medicare. For most people, the IEP is the seven-month period that includes:
This is the time frame when your Medicare coverage beings and most people sign up.
Medicaid/MassHealth Standard: A federal and state program that helps people with limited income and resources pay their medical costs. Medicaid programs vary by state. Most healthcare costs are covered under Medicaid if you qualify for both Medicare and Medicaid. In Massachusetts, Medicaid is referred to as MassHealth.
Network Providers/Pharmacies: These are the facilities, providers, pharmacies, and suppliers your Medicare health plan has contracted with to provide healthcare and prescription drug services for you.
OEP (Open Enrollment Period): OEP is the time when people on Medicare can switch plans. They can switch to a different Medicare Advantage plan or to Original Medicare. They can also enroll in a Prescription Drug plan. This time period lasts from January 1 to March 31.
Original Medicare: Original Medicare is a fee-for-service health plan that has two parts:
After you pay any applicable deductible, Medicare pays its share of the allowed amount, and you pay your share (co-insurance and copays). Learn more about Original Medicare.
Out-of-Pocket Costs: Health or prescription drug costs that you must pay on your own because they aren’t covered by Medicare or other insurance.
Pre-existing Condition: A health condition you had before your new health coverage begins.
Premium: This is a monthly payment. It goes to Medicare, an insurance company, or a healthcare plan for health insurance or prescription drug coverage.
Preferred Prescription Drugs: Brand-name drugs that are listed on the plan’s formulary (a list of preferred prescription drugs).
Preferred Provider Organization (PPO): A type of health plan that provides maximum benefits if you visit an in-network physician or provider. It will still provide some coverage for out-of-network providers. When you need emergency or urgent care, it will usually cost more to receive that care from out-of-network providers than in-network providers.
Preventive Services: Healthcare services that prevent or detect illness early, when treatment is likely to be most successful. Preventive services include Pap tests, flu shots, and mammogram screenings.
Primary Care Physician: The doctor you see first for most health problems. They make sure you get the care you need to keep you healthy. They may speak with other doctors and healthcare providers about your care and refer you to them. In many Medicare Advantage plans, you must see your primary care doctor before you see any other healthcare provider.
Prior Authorization: This is also known as a PA. It is the decision your health insurance company makes to confirm that a requested healthcare service, treatment, prescription drug, or durable medical equipment is medically necessary.
Referral: A written order from your primary care doctor to see a specialist or receive a specific medical service. Many Health Maintenance Organizations (HMOs) require a referral before you can receive medical care from a provider other than your primary care doctor. A plan may not pay for these services without a referral from your doctor.
Respite Care: Temporary care provided in a nursing home, hospice inpatient facility, or hospital. Respite care allows a family member or friend who serves as the patient’s caregiver to rest or simply take some time off.
Service Area: This term refers to a specific geographic area a member must reside in to be accepted by a health plan. If you move out of this specified service area, the plan may cancel your coverage.
Special Enrollment Period (SEP): This time period is triggered by specific life events. For example,moving, losing coverage, or getting married. These events enable you to enroll in Part D or a Medicare Advantage plan (Part C).
Special Needs Plan (SNP): A special type of Medicare Advantage plan (Part C) that provides specialized care for people who have both Medicare and Medicaid. These people have specific diseases, certain healthcare needs, or limited incomes.
Telemedicine: Virtual healthcare services the practitioner provides to a patient. These services take place on a computer, phone, or television at the patient’s home or other off-site location.
Tiers: Specific groups of prescription drugs with costs that are based on the tier they have been assigned to. Generally, a lower-tier drug will cost you less than a drug in a higher-tier group.
TTY (teletypewriter): A communication device used by people who are deaf, hard of hearing, or have a severe speech impairment.
Obtaining Medicare coverage is a major milestone in your life. We hope these terms will help you better understand how Medicare works and the choices you can make to get the best coverage for you.