Definitions of key terms and acronyms related to Medicare Advantage and Medicare Supplement
1 | Medicare | Medicare is a federal health insurance program primarily for people aged 65 and older, certain younger individuals with disabilities, and people with End-Stage Renal Disease (ESRD) or Lou Gehrig’s disease (ALS). It consists of different parts, including Part A (hospital insurance), Part B (medical insurance), Part C (Medicare Advantage), and Part D (prescription drug coverage).
2 | Medicare Supplement (Medigap) | Medicare Supplement, also known as Medigap, is private health insurance designed to help cover the “gaps” in Original Medicare (Part A and Part B). These plans typically cover out-of-pocket costs such as copayments, coinsurance, and deductibles.
3 | Medicare Advantage (MA) | Medicare Advantage is an alternative to Original Medicare (Parts A and B), offered by private insurance companies approved by Medicare. These plans provide all the benefits of Original Medicare, often with additional services such as prescription drug coverage, dental, vision, and wellness programs.
4 | Premium | Premium refers to the amount of money an individual pays for their Medicare Supplement or Medicare Advantage plan on a monthly basis. It is separate from any Medicare Part B premium that may be required.
5 | Copayment | A copayment is a fixed amount that an individual pays out-of-pocket for covered services under their Medicare Supplement or Medicare Advantage plan, usually at the time the service is received. Copayments can vary depending on the type of service provided.
6 | Coinsurance | Coinsurance is the percentage of the cost of a covered healthcare service that an individual is required to pay under their Medicare Supplement or Medicare Advantage plan after meeting any deductible. For example, if a service has a 20% coinsurance, the individual would pay 20% of the cost, and the plan would pay the remaining 80%.
7 | Deductible | A deductible is the amount of money an individual must pay out-of-pocket for covered healthcare services before their Medicare Supplement or Medicare Advantage plan begins to pay. Deductibles can vary depending on the plan and the services covered.
8 | Out-of-Pocket Maximum | The out-of-pocket maximum is the maximum amount an individual is required to pay for covered services under their Medicare Supplement or Medicare Advantage plan during a specific period, typically a calendar year. Once this limit is reached, the plan covers 100% of covered services for the remainder of the period.
9 | Network | A network refers to the group of doctors, hospitals, pharmacies, and other healthcare providers that have contracted with a Medicare Advantage plan to provide services to its members. Staying within the plan’s network often results in lower out-of-pocket costs for members.
10 | Provider | A provider is a healthcare professional or facility that delivers medical services to patients. This can include doctors, hospitals, clinics, pharmacies, and specialists.
11 | Formulary | A formulary is a list of prescription drugs covered by a Medicare Advantage or Part D prescription drug plan. Each plan has its own formulary, and drugs are typically categorized into tiers based on cost and coverage rules.
12 | Pre-Existing Condition | A pre-existing condition is a health problem that existed before the start of a new health insurance policy, including Medicare Supplement or Medicare Advantage plans. These conditions can affect coverage options and premiums.
13 | Guaranteed Issue Rights | Guaranteed issue rights are protections that ensure individuals can enroll in a Medicare Supplement plan without being denied coverage or charged higher premiums, regardless of their health status or pre-existing conditions. These rights are typically triggered during specific enrollment periods or life events.
14 | Annual Enrollment Period (AEP) | The Annual Enrollment Period is a period each year when individuals can make changes to their Medicare Advantage or Part D prescription drug coverage. It usually occurs from October 15 to December 7.
15 | Special Enrollment Period (SEP) | A Special Enrollment Period is a period outside of the Annual Enrollment Period when individuals may be eligible to enroll in or make changes to their Medicare Advantage or Medicare Supplement plans due to qualifying life events, such as moving, losing other coverage, or becoming eligible for Medicaid.
16 | Medically Necessary | Medically necessary refers to healthcare services or items that are deemed appropriate, reasonable, and necessary for the diagnosis or treatment of a medical condition. Medicare Supplement and Medicare Advantage plans typically cover services that are medically necessary.
17 | Disenrollment | Disenrollment refers to the process of ending enrollment in a Medicare Advantage plan or Medicare Supplement plan. This can occur voluntarily or involuntarily and may have specific timeframes or requirements depending on the circumstances.
18 | Health Maintenance Organization (HMO) | A Health Maintenance Organization is a type of Medicare Advantage plan that typically requires members to receive their healthcare services from a network of providers and obtain referrals from a primary care physician for specialist care.
19 | Preferred Provider Organization (PPO) | A Preferred Provider Organization is a type of Medicare Advantage plan that allows members to receive care from both in-network and out-of-network providers, although out-of-network care may result in higher out-of-pocket costs.
20 | Medicare Star Ratings | Medicare Star Ratings are scores assigned to Medicare Advantage and Part D prescription drug plans by the Centers for Medicare & Medicaid Services (CMS) based on various quality measures. These ratings help beneficiaries compare plan quality and performance.
21 | Coordination of Benefits | Coordination of Benefits is the process by which Medicare coordinates payments with other types of insurance coverage an individual may have, such as employer-sponsored insurance, to ensure that healthcare costs are appropriately covered and not duplicated.
22 | Dual Eligible | Dual eligible refers to individuals who are eligible for both Medicare and Medicaid. These individuals often have low incomes and may qualify for additional assistance with Medicare premiums, copayments, and deductibles.
23 | Medicare Savings Programs | Medicare Savings Programs are state-run programs that help low-income individuals pay for Medicare premiums, copayments, and deductibles. Eligibility criteria and benefits vary by state.
24 | Original Medicare | Original Medicare refers to Medicare Part A and Part B, which are provided by the federal government. It does not include additional coverage options such as Medicare Advantage or Medicare Supplement plans.
25 | Service Area | A service area is the geographic region within which a Medicare Advantage plan is offered. Plans may have different service areas, and coverage options and costs can vary depending on location.
26 | Dual-Eligible Special Needs Plan (D-SNP) | A Dual-Eligible Special Needs Plan is a type of Medicare Advantage plan specifically designed for individuals who are eligible for both Medicare and Medicaid (dual-eligible). D-SNPs offer tailored benefits and care coordination to address the unique healthcare needs of this population.
27 | Trial Right | Trial Right refers to a one-time opportunity for individuals to try out a Medicare Advantage plan and switch back to Original Medicare with a Medicare Supplement plan within a specified timeframe if they are dissatisfied with their Medicare Advantage coverage.
28 | Health Savings Account (HSA) | A Health Savings Account is a tax-advantaged savings account that individuals with high-deductible health plans can use to save money for medical expenses. Medicare beneficiaries cannot contribute to an HSA, but they can use funds from an existing HSA to pay for qualified medical expenses.
29 | Open Enrollment Period (OEP) | The Open Enrollment Period is a period during which individuals with Medicare Advantage plans can make certain changes to their coverage, such as switching to a different Medicare Advantage plan or returning to Original Medicare. It typically occurs from January 1 to March 31 each year.
30 | Part D Late Enrollment Penalty | The Part D Late Enrollment Penalty is an additional amount added to a Medicare beneficiary’s Part D premium if they do not enroll in a Medicare prescription drug plan when they are first eligible and do not have creditable prescription drug coverage from another source.
31 | Guaranteed Renewable | Guaranteed Renewable refers to Medicare Supplement plans that cannot be canceled by the insurance company as long as the premiums are paid on time. This ensures that individuals can keep their coverage regardless of changes in health or claims history.
32 | Cost Sharing | Cost Sharing refers to the portion of healthcare expenses that individuals are responsible for paying out-of-pocket, including deductibles, copayments, and coinsurance. Medicare Supplement and Medicare Advantage plans may have different cost-sharing requirements.
33 | Health Maintenance Organization Point of Service (HMO-POS) | An HMO Point of Service is a variation of the traditional HMO Medicare Advantage plan that allows members to seek care from out-of-network providers in certain situations, typically at a higher cost.
34 | Special Needs Plan (SNP) | A Special Needs Plan is a type of Medicare Advantage plan designed for individuals with specific health needs, such as chronic conditions, disabilities, or those living in institutions. SNPs provide tailored benefits and care coordination to meet the unique needs of their members.
35 | Part C Premium | Part C Premium refers to the monthly premium paid by individuals enrolled in a Medicare Advantage plan. In addition to the Part B premium, individuals may be required to pay a separate premium for their Medicare Advantage coverage, depending on the plan.
36 | Medigap Guaranteed Issue Period | The Medigap Guaranteed Issue Period is a six-month period during which individuals have guaranteed issue rights to enroll in a Medicare Supplement plan without medical underwriting. This period typically begins when an individual first enrolls in Medicare Part B and is 65 or older.
37 | Network Adequacy | Network Adequacy refers to the sufficiency of healthcare providers within a Medicare Advantage plan’s network to meet the needs of its members. Plans must meet certain standards for network adequacy to ensure that members have access to necessary medical services.
38 | Out-of-Area Coverage | Out-of-Area Coverage refers to the ability of a Medicare Advantage plan to provide coverage for healthcare services received outside of the plan’s service area, typically for emergencies or urgent care situations.
39 | Utilization Management | Utilization Management is a process used by Medicare Advantage plans to evaluate and manage the use of healthcare services by their members. Techniques may include prior authorization, step therapy, and quantity limits to ensure appropriate and cost-effective care.
40 | Maximum Out-of-Pocket Limit | The Maximum Out-of-Pocket Limit is the highest amount that individuals are required to pay for covered services under their Medicare Advantage plan during a specific period, such as a calendar year. Once this limit is reached, the plan covers 100% of covered services for the remainder of the period.
41 | Private Fee-for-Service (PFFS) | A Private Fee-for-Service plan is a type of Medicare Advantage plan that allows members to receive care from any Medicare-approved provider who agrees to accept the plan’s terms and conditions, regardless of whether they are in-network or out-of-network.
42 | Welcome to Medicare Preventive Visit | The Welcome to Medicare Preventive Visit is a one-time appointment with a healthcare provider offered to individuals within the first 12 months of enrolling in Medicare Part B. During this visit, the provider reviews the individual’s medical history, performs a basic physical exam, and provides preventive health education.
43 | Five-Star Quality Rating System | The Five-Star Quality Rating System is a rating system used by Medicare to assess the quality and performance of Medicare Advantage and Part D plans. Plans are rated on a scale of one to five stars based on various measures of quality and member satisfaction.
44 | Long-Term Care | Long-Term Care refers to a range of services and supports designed to help individuals with chronic illnesses or disabilities perform daily activities when they can no longer do so independently. Medicare generally does not cover long-term care services, but some Medicare Advantage plans may offer limited coverage for certain services.
45 | Medically Frail | Medically Frail refers to individuals who have complex medical needs and may require additional care and support. Some Medicare Advantage plans offer specialized programs or benefits tailored to the needs of medically frail individuals.
46 | Annual Notice of Change (ANOC) | The Annual Notice of Change is a document sent by Medicare Advantage and Part D prescription drug plans to their members each year before the Annual Enrollment Period. It outlines any changes to the plan’s costs, benefits, or rules for the upcoming year.
47 | Medicare Cost Plan | A Medicare Cost Plan is a type of Medicare Advantage plan available in certain areas that allow members to receive services from both in-network and out-of-network providers. Cost plans provide coverage similar to Original Medicare but may offer additional benefits.
48 | Telehealth | Telehealth refers to the use of telecommunications technology, such as video conferencing or remote monitoring, to provide healthcare services to patients at a distance. Some Medicare Advantage plans offer telehealth benefits to provide convenient access to care for their members.
49 | Chronic Care Management | Chronic Care Management is a healthcare service designed to help individuals with chronic conditions manage their health and improve their quality of life. Some Medicare Advantage plans offer chronic care management programs to provide additional support and coordination for members with complex medical needs.
50 | Quality Improvement Organization (QIO) | Quality Improvement Organizations are independent organizations contracted by the Centers for Medicare & Medicaid Services (CMS) to improve the quality of care provided to Medicare beneficiaries. QIOs work with healthcare providers and organizations to promote best practices and quality improvement initiatives.
51 | Low-Income Subsidy (LIS) | The Low-Income Subsidy, also known as Extra Help, is a program that helps Medicare beneficiaries with limited income and resources pay for prescription drug costs associated with Medicare Part D. Eligible individuals receive assistance with premiums, deductibles, and copayments for Part D coverage.
52 | Dual Eligible Special Needs Plan (D-SNP) Look-In Period | The Dual Eligible Special Needs Plan Look-In Period is a period that allows individuals who are eligible for both Medicare and Medicaid to enroll in a D-SNP at any time throughout the year, rather than being restricted to specific enrollment periods.
53 | Care Coordination | Care Coordination is the process of organizing and coordinating healthcare services and resources to ensure that individuals receive comprehensive, timely, and appropriate care. Medicare Advantage plans often offer care coordination services to help members navigate the healthcare system and manage their health effectively.
54 | Evidence of Coverage (EOC) | The Evidence of Coverage is a document provided by Medicare Advantage and Part D plans that outlines the plan’s benefits, coverage rules, costs, and rights and responsibilities of the member. It is sent to plan members annually and serves as an important reference for understanding plan coverage.
55 | Special Enrollment Period for Institutionalized Individuals | The Special Enrollment Period for Institutionalized Individuals is a period during which individuals who are living in certain institutions, such as nursing homes or long-term care facilities, have the opportunity to enroll in or change their Medicare Advantage or Part D coverage outside of the usual enrollment periods.
56 | Preferred Provider Organization (PPO) Out-of-Pocket Maximum | The Preferred Provider Organization Out-of-Pocket Maximum is the maximum amount that members of a PPO Medicare Advantage plan are required to pay for covered services during a specific period, such as a calendar year. Once this limit is reached, the plan covers 100% of covered services for the remainder of the period.
57 | Special Enrollment Period for Five-Star Plans | The Special Enrollment Period for Five-Star Plans is a period during which individuals can enroll in a Medicare Advantage plan or Part D prescription drug plan that has received a five-star quality rating from Medicare. This enrollment period is available once per year from December 8 to November 30 of the following year.
58 | Provider Network Directory | A Provider Network Directory is a comprehensive list of healthcare providers, facilities, and pharmacies that participate in a Medicare Advantage plan’s network. Plan members can use the directory to find in-network providers and compare options for receiving care.
59 | Health Risk Assessment (HRA) | A Health Risk Assessment is a questionnaire used by healthcare providers to gather information about an individual’s health status, lifestyle, and medical history. Some Medicare Advantage plans require members to complete an HRA as part of their annual wellness visit to identify potential health risks and develop personalized care plans.
60 | Centers for Medicare & Medicaid Services (CMS) | The Centers for Medicare & Medicaid Services is the federal agency responsible for administering the Medicare program, as well as overseeing state Medicaid programs. CMS sets standards and regulations for Medicare Advantage and Part D plans, monitors plan performance, and provides information and resources to beneficiaries.
61 | Medicare Summary Notice (MSN) | The Medicare Summary Notice is a summary of healthcare services and supplies billed to Medicare on behalf of a beneficiary. It provides detailed information about each claim, including the date of service, provider name, and amount billed, and serves as a record of Medicare-covered services received.
62 | Personalized Health Plan | A Personalized Health Plan is a care plan developed for Medicare Advantage plan members based on their individual health needs, preferences, and goals. These plans may include recommendations for preventive care, chronic disease management, and lifestyle modifications to support optimal health and well-being.
63 | Advance Directive | An Advance Directive is a legal document that outlines an individual’s preferences for medical treatment and end-of-life care in the event that they become unable to communicate their wishes. Medicare beneficiaries are encouraged to create advance directives to ensure that their healthcare preferences are respected and followed.
