Glossary of Terms




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Do you still have some questions on the various terminology associated with Medicare and insurance? Here we list the most important concepts in the Glossary of Terms. If you don't see the term you're looking for just get in touch with us today and one of our friendly agents will guide you through any questions.


Medicare is a federal health insurance for people 65 or older, some younger people with disabilities, people with End-Stage Renal Disease.

Medicaid is a medical benefits program administered by states and subsidized by the federal government... Medicaid provides public assistance to persons whose income and resources are insufficient to pay for health care.

Part A helps covers your inpatient care in hospitals, critical access hospitals, and Skilled nursing facilities (not custodial or long-term care).  It also covers hospice care and some home health care.

Part B helps cover medical services like doctors’ services, outpatient care, and other medical services that Part A doesn’t cover. Part B is optional.  Part B helps pay for covered medical services and items when they are medically necessary.

Part C is 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/MAPD plans, are offered by private insurance companies approved by Medicare.

Part D is a prescription drug benefit program that is offered as part of the Medicare.

Medicare Supplement is a health insurance policy sold by private companies to fill the “gaps” in Original Medicare Plan coverage for a monthly premium. (Commonly referred to as “Medigap plans”).

Medicare Advantage Medicare Advantage plans, sometimes called “Part C “or “MA/MAPD,” are offered by Medicare-approved private companies that must follow the rules set by Medicare. Most Medicare Advantage plans contain prescription drug coverage (Part D). In most cases you’ll need to use health care providers who participate in the plans network.

HMO (Health Maintenance Organization)  is a type of health insurance plan that usually limits coverage to care from doctors who work for a or contract with the HMO. It generally won’t cover out-of-network care except in an emergency.  HMOs often proved integrated care and focus on prevention and wellness.

PPO (Preferred Provider Organization) A type of health plan that contracts with medical providers, such as hospitals and doctors, to create a network of participating providers. You pay less if you use providers that belong to the plan’s network.

RPPO (Regional Preferred Provider Organization) In addition to the benefits of a PPO. With this plan, you can see out-of-network providers, generally at a higher cost, as long as they participate in Medicare and accept the plan.

HMO-POS (Health Maintenance Organization - Point of Sale) allows members to use healthcare providers that are outside the plan’s network for some or all services.

DSNP (Dual Special Needs Plan) enrolls individuals who are entitled to both Medicare and medical assistance from a state plan under Medicaid. States cover out of pocket cost, deductibles, copays and help with the cost of medications.

Part D Donut Hole Most Medicare drug plans have a coverage gap (also called the “donut hole”). This means there’s a temporary limit on what the drug plan will cover for drugs.

Part D Catastrophic coverage  In 2022, you’ll enter the donut hole when your spending + your plan’s spending reaches $4,430. And you leave the donut hole—and enter the catastrophic level—when your spending + manufacturer discounts reach $7,050.

Copay is a flat fee that you pay on the spot each time you go to your doctor or fill a prescription.

Coinsurance The percentage of costs of covered health care service you pay after you’ve paid your deductible.

Deductible The amount you pay for covered health care services before your insurance plan starts to pay.

Maximum out of Pocket The most you have to pay for covered services in a plan year.  After you spend this amount on deductibles, copayments, and coinsurance for in-network care and services, your health plan pays 100% of costs covered benefits.

Part D IRMAA is the Income-Related Adjustment Amount (IRMAA) is an amount you may have to pay in addition to your Part B or Part D premium if your income is above a certain level.

Part D Late Enrollment Penalty is an amount that’s permanently added to your Medicare drug coverage (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 Medicare drug coverage or other credible drug coverage.

Part B Late Enrollment Penalty The Part B Penalty increases our monthly Part B premium by 10% for each full 12-month period if you are new to Medicare and don’t sign up for Part B when you’re first eligible.

Plan G Medicare Plan G is a supplemental Medigap health insurance plan that is available to individuals who are over 65 and currently enrolled in Medicare. It is offered by private insurance companies, Plan G is standardized by the federal government, so that means, all plan G’s are the same, but different insurance companies are allowed to charge different amounts.

Plan F is the most comprehensive Medicare supplement plan. This plan covers Medicare deductibles, and all copays and coinsurance, which means you pay nothing out of pocket throughout the year. Plan F is no longer available unless your Part B Medicare date is prior to 01/01/2020

Plan N is coverage that helps pay for the out-of-pocket expenses not covered by Medicare Parts A and B.  It has near benefits to plan G but with lower premiums.

High Deductible Plan F is an alternative version of the standard plan F. The difference is the beneficiary agrees to pay the deductible before full coverage kicks in. Once you reach the deductible, the plan covers the left-over costs going forward, keeping the monthly premium low.

High Deductible Plan G is an alternative version of the standard plan G. The difference is the beneficiary agrees to pay the deductible before full coverage kicks in. Once you reach the deductible, the plan covers the left-over costs going forward, keeping the premiums low.

Underwriting A process used by insurance companies to try to figure out your health status when you’re applying for health insurance.

Annual Notice of Change (ANOC) Letters is the notice you receive from your Medicare Advantage or Part D plan in late September. This notice gives a summary of any changes in the plan’s cost and coverage that will take effect January 1 of the next year.

Annual Enrollment Period The Annual Enrollment Period otherwise referred to as AEP, is the time of year when a Medicare beneficiary can make changes to their current coverage. In Medicare it runs from October 15th to December 7th.

Open Enrollment Period This enrollment period runs from January 1- March 31 every year.  If you already have a Medicare Advantage plan, you can switch to a different Medicare Advantage plan.

Special Election Period(s) or Special Enrollment Period means you can make changes to your Medicare Advantage and Medicare prescription drug coverage when certain events happen in your life, like if you move or lose other insurance coverage.  Rules about when you can make changes and the type of changes you can make are different for each SEP.

Initial Election Period  Generally when you turn 65, this is called your initial Enrollment Period. It lasts 7 months, starting 3 months before you turn 65, and ending 3 months after you turn 65.

Hospital Indemnity Depending on the plan, hospital indemnity insurance gives you cash payments to help you pay for the added expenses that may come while you recover.

Critical Illness Covers expenses for major health conditions such as heart attack, stroke or cancer and may pay a lump sum, depending on the policy.

Network - Each type of Medicare Advantage Plan has different network rules. A network is a group of doctors, hospitals, and medical facilities that contract with a plan to provide services. There are various ways a plan may manage your access to specialists or out-of-network providers.

Out-of-network - a doctor or physician does not have a contract with your health insurance plan provider. This can sometimes result in higher prices. Some health plans, such as an HMO plan, will not cover care from out-of-network providers at all, except in an emergency.

Preferred Pharmacy – A pharmacy within your Prescription Drug Plans network that most often offers prescriptions at the lowest cost-sharing amount. Use Preferred Pharmacies whenever possible to save the most money.

Standard Pharmacy - A pharmacy within your Prescription Drug Plans network that most often offers prescriptions at the Higher cost-sharing amount. Use Preferred Pharmacies whenever possible to save the most money.

Out-of-Network Pharmacy – Pharmacies that are not available within your Prescription Drug Plans network. If you use an out-of-network pharmacy you may be responsible for the full retail cost of the medication – unless it’s filled under emergency circumstances.

GoodRx - GoodRx gathers current prices and discounts to help you find the lowest cost pharmacy for your prescriptions.

GlicRx - GlicRx is a free discount prescription drug discount card providing consumers up to 80%* savings on purchases of prescription drugs at over 35,000 pharmacies nationwide

Manufacturers Rebates - Rebates are discounts paid by drug manufacturers after a prescription is dispensed to insurers, pharmacy benefit managers (PBMs) and, in the case of generic drugs, pharmacies (either directly or through their purchasing agents).

Mail Order Pharmacy - Mail-order pharmacies operate through your health insurance plan and can be cheaper and more convenient than getting your medications from a local pharmacy. Medications are delivered to your door.

LIS (Low Income Subsidy) helps people with Medicare pay for prescription drugs, and lowers the costs of Medicare prescription drug coverage. Low Income Subsidy can help pay for Prescription Drug copays, deductibles & premiums

QMB (Qualified Medicare Beneficiary) - The Qualified Medicare Beneficiary (QMB) Program is one of the four Medicare Savings Programs that allows you to get help from your state to pay your Medicare premiums. This Program helps pay for Part A premiums, Part B premiums, and deductibles, coinsurance, and copayments.

Primary Care Physician - A primary care physician is a medical doctor who’s trained to prevent, diagnose, and treat a broad array of illnesses and injuries in the general population. In some cases, your Primary Care Physician (PCP) may help you manage your care and provide referrals to see a specialist.

Specialist - doctors who have advanced training and degrees in a particular branch of medicine, such as heart health or bone health. Depending on the field, many can also perform surgery

Value Added Benefits – Included in most advantage plans, Value Added Benefits and services are additional benefits provided to you, as a member of the plan, not included in Original Medicare. Value Added Benefits include, but are not limited to; Transportation, Gym Memberships, OTC Allowance, Dental & Part B Reductions.

SilverSneakers – Included in some advantage plans, SilverSneakers is a gym membership program that gives you free or discounted access to a wide range of gyms and exercise facilities.

OTC (Over-the-Counter) Allowance – Included in some advantage plans, the Over-the counter Allowance provides an allowance for certain over the counter items like; Vitamins, Supplements & Toiletries.

Transportation – Included in some advantage plans, transportation benefits include a certain amount of trips to and from the plans in-network providers.

Flex Card - Included in some advantage plans, The Flex Card is a debit card preloaded with a set amount between $200 - $2,500, depending on your plan and service area. The funds can be used to help pay for dental, vision or hearing needs beyond your plan.

Part B Premium Reduction/Part B Buyback - A Benefit included in some Medicare Advantage Plans that reduces how much Medicare Charges for Part B of Medicare ($170.10 in 2022). Part B Premium Reductions may cover some or all of the $170.10 Medicare charges the average Medicare Beneficiary.

Trial Rights – Medicare Trial Rights allow a Medicare Beneficiary to “try” a Medicare Advantage plan for 1 year. As long as this is the beneficiaries first enrollment.

Guaranteed Issue - Guaranteed Issue Rights (Also Called "Medigap Protections") are rights you have in certain situations when insurance companies must offer you certain Medigap policies. In these situations, an insurance company:

  • Must sell you a Medigap policy
  • Must cover all your pre-existing health conditions
  • Can't charge you more for a Medigap policy because of past or present health problems
  • In most cases, you have a guaranteed issue right when you have other health coverage that changes in some way, like when you lose the other health care coverage. In other cases, you have a "trial right" to try a Medicare Advantage Plan (Part C) and still buy a Medigap policy if you change your mind.

MBI (Medicare Beneficiary Identifier) - The Medicare Beneficiary Identifier (MBI) is the new identification number that has replaced SSN-based health insurance claim numbers (HICNs) on all Medicare transactions, such as billing, claim submissions and appeals - Medicare's free, secure, online service for managing personal information regarding Original Medicare benefits and services. Original Medicare beneficiaries can create an account with and use it to check information about their coverage, enrollment status, and Medicare claims.

Preventative Care - Preventive care helps detect or prevent serious diseases and medical problems before they can become major. Annual check-ups, immunizations, and flu shots, as well as certain tests and screenings, are a few examples of preventive care. This may also be called routine care.

Anniversary Rule - The anniversary rule allows you to change plans within about 60 days (depending on your state) of your Initial Enrollment anniversary in a Medigap policy. At the time of this writing the following states allow for an Anniversary Rule: California, Oregon, Idaho, Illinois, & Nevada

Part B Excess Charge - Doctors who do not accept Medicare assignment may charge you up to 15 percent more than what Medicare is willing to pay. This amount is known as a Medicare Part B excess charge.

Medicare Assignment - Assignment means that your doctor, provider, or supplier agrees (or is required by law) to accept the Medicare-approved amount as full payment for covered services.

Part A Effective Date – The date in which your Part A (in-patient hospital) of Medicare began. Your Part A Effective date can be found on your Red, White & Blue Medicare A&B card.

Part B Effective Date – The date in which your Part B (outpatient medical) of Medicare began. Your Part B Effective date can be found on your Red, White & Blue Medicare A&B card.

Outpatient Hospital Stay - You're an outpatient if you're getting emergency department services, observation services, outpatient surgery, lab tests, or X-rays, or any other hospital services, and the doctor hasn't written an order to admit you to a hospital as an inpatient. In these cases, you're an outpatient even if you spend the night in the hospital.

Inpatient Hospital Stay – Inpatient care means you are admitted to the hospital on a Doctor’s order and usually for a stay for 24 hours or more. For example: If you went to the emergency room you are considered outpatient. If your emergency room visit results in a doctors order to be formally admitted to the hospital, then your status changes to inpatient care.

Medicare Supplements are STANDARDIZED - Every Medigap policy must follow federal and state laws designed to protect you, and it must be clearly identified as "Medicare Supplement Insurance." Insurance companies can sell you only a "standardized" policy identified in most states by letters.

All policies offer the same basic benefits but some offer additional benefits, so you can choose which one meets your needs. In MassachusettsMinnesota, and Wisconsin, Medigap policies are standardized in a different way.

Scope of Appointment - a federally required form used to document an appointment between an insurance agent and a Medicare beneficiary to ensure that no other types of products are discussed outside of what the beneficiary originally requested

Summary of Benefits -  A snapshot of a health plan’s cost, benefits, covered health care services, and other features like cost sharing rules and include significant limits and exceptions to coverage in easy-to-understand terms.

Explanation of Benefits (this is not a bill) - The Explanation of Benefits is not a bill so, no, you shouldn't pay anything yet. It's really just a report of what your insurance plan is going to cover, based on what the doctor has charged and what type of plan you have.

Evidence of Coverage – A document that describes in detail the health care benefits covered by the health plan. It provides documentation of what that plan covers and how it works, including how much you pay.

CMS Star Rating  - Star Ratings are released annually and reflect the experiences of people enrolled in Medicare Advantage and Part D prescription drug plans. The Star Ratings system supports CMS's efforts to empower people to make health care decisions that are best for them

AM Best Rating – Est 1899, AM Best Rating is a credit rating agency specializing in the insurance industry. AM Best provides accurate, timely and comprehensive information to anyone interested in the creditworthiness of insurance companies and insurance-linked securities.






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