Medicare Terms and Definitions

vinnstock/ShutterstockAssignment:
An agreement with a doctor to be paid directly by Medicare, accept the payment amount Medicare approves for the service, and not bill you anything other than the Medicare deductible and coinsurance.

Coinsurance:
The amount you have to pay for medical services after paying any deductibles. Coinsurance is usually a percentage of the service. So if you have a $10,000 doctor bill after deductibles and a 20 percent coinsurance rate, Medicare would pay $8,000 and you would pay $2,000.

Co-payment:
The amount you have to pay for a medical service or supply, for example, a doctor’s visit or a prescription. A co-payment is usually a set amount, such as $10 or $20.

Deductible:
The amount you have to pay for health care or prescriptions before Original Medicare, your prescription drug plan, or other insurance kicks in.

Excess charge:
The amount over the approved Medicare payment that some doctors and other health-care providers can charge you under Original Medicare.

Guaranteed issue rights:
Also called “Medigap Protections.” Means that Medigap plans can’t deny you a Medigap policy, refuse to cover preexisting conditions, or charge you more for the policy based on your age or medical status if you buy the policy within six months of signing on for Medicare Part B.

Guaranteed renewable:
Insurance companies can’t cancel your Medigap policy unless you lie on your application, commit fraud, or don’t pay your premiums. All Medigap policies issued since 1992 are guaranteed renewable.

Medicaid:
A joint federal and state health insurance program for those who meet certain financial requirements.

Medicare Advantage (Part C):
A managed-care Medicare plan. The managed-care organization contracts with Medicare to provide you with all your Medicare Part A and Part B benefits. Most Medicare Advantage plans also provide prescription drug coverage.

Medicare-approved amount:
The maximum amount that doctors who accept a Medicare assignment can be paid for a service. In other words, they can’t bill you any extra.

Medicare Medical Savings Account (MSA):
A Medicare Advantage plan that combines a high deductible with a medical savings account. The plan deposits money each year into your account. You do not pay any taxes on the money or the interest it earns as long as you use it for health-care costs, including those that aren’t covered by Medicare. Any money left in the account at the end of the year can still be used for medical costs in future years. Unlike non-Medicare medical savings accounts, you cannot deposit any money into this account.

Medicare Prescription Drug Plan (Part D):
A stand-alone drug plan that adds prescription drug coverage to Original Medicare and some other Medicare plans.

Medicare Private Fee-for-Service (PFFS):
A type of Medicare Advantage (Part C) plan in which you can see the same doctors and use the same hospitals as someone with Original Medicare. However, because the plan determines how much it will pay doctors and hospitals and how much you must pay when you receive care, you may pay more (or less) for Medicare-covered benefits than if you had Original Medicare.

Medicare SELECT:
A type of Medigap policy that may require you to use hospitals and, in some cases, doctors, within its network to be eligible for full benefits.

Medigap policy:
Government-authorized supplemental insurance that you would buy to cover costs not covered under Original Medicare.

Original Medicare:
Original Medicare is fee-for-service insurance coverage under which the government directly pays health-care providers for many hospital and medical costs. It includes Medicare Part A and Part B.

Pre-existing condition:
A health problem you had or have before a new insurance policy starts.

Premium:
A monthly fee paid to Medicare, an insurance company, or a health-care plan to maintain your insurance coverage.

Preventive services:
Health care to prevent illness or detect illness at an early stage. Screening mammograms, flu and pneumonia vaccines, and Pap tests are examples of preventive services.

Qualified Medicare beneficiary (QMB):
Someone entitled to Medicare Part A, whose income is not higher than the Federal Poverty Level, and whose resources (i.e., a house, car, etc.) do not exceed twice the Supplemental Security Income level. These people are eligible to have their state Medicaid system pay their Medicare premiums, deductibles, coinsurance and co-payment amounts (except for Part D).

State Health Insurance Assistance Program (SHIP):
State programs that provide free local health insurance counseling to people with Medicare. The federal government funds these programs.