Medicare Glossary

Hospital insurance covering inpatient hospital stays, skilled nursing facility care, hospice, and some home health services. Most people qualify for premium-free Part A if they or their spouse worked and paid Medicare taxes for at least 10 years.

Medical insurance covering outpatient care, doctor visits, preventive services, and durable medical equipment. Requires a monthly premium (the standard amount is set annually by CMS).

The official designation for Medicare Advantage plans — private insurance alternatives that bundle Parts A and B, and usually Part D. See Medicare Advantage.

Prescription drug coverage offered by private insurers and approved by Medicare. Each plan has its own formulary (drug list) and cost structure. Enrolling late without creditable coverage triggers a permanent premium penalty.

A 7-month window centered on your 65th birthday: the 3 months before, the month of, and the 3 months after. Enrolling in the first 3 months means coverage starts on your birthday month; enrolling after may delay the start date. This is the best time to enroll without penalty.

Lets you enroll in Medicare outside your IEP when a qualifying life event occurs, such as losing employer-sponsored health coverage. Generally begins when coverage ends and lasts 8 months.

COBRA continuation coverage does not trigger a SEP. Enroll in Medicare before COBRA begins to avoid a late enrollment penalty.

Runs January 1–March 31 each year for people who missed their IEP and do not qualify for a SEP. Coverage begins July 1. A late enrollment penalty typically applies.

October 15–December 7 each year. You can switch between Original Medicare and Medicare Advantage, change Medicare Advantage plans, or add, drop, or switch Part D drug plans. Changes take effect January 1. Also called the Annual Election Period (AEP).

January 1–March 31 each year. If you are already enrolled in a Medicare Advantage plan, you can switch to a different MA plan or return to Original Medicare. Cannot be used to switch from Original Medicare to Medicare Advantage.

Traditional government-run Medicare consisting of Part A (hospital) and Part B (medical). You can see any doctor or hospital that accepts Medicare — no network restrictions. Does not include prescription drug coverage (Part D) or a cap on annual out-of-pocket costs.

Private insurance plans that cover everything in Original Medicare (Parts A and B) and usually Part D, often with extra benefits like dental and vision. Network restrictions apply — you generally must use in-network providers. Sold under Part C.

Private insurance that pays costs not covered by Original Medicare, such as deductibles, coinsurance, and copays. Plans are standardized and labeled A through N. Cannot be combined with a Medicare Advantage plan.

The most comprehensive standardized Medigap plan. Covers everything Original Medicare doesn't except the annual Part B deductible (~$240). No copays for office visits or ER visits, and covers Part B excess charges. Generally the right choice for people with chronic conditions or high healthcare utilization.

A standardized Medigap plan with slightly lower premiums than Plan G, in exchange for copays: up to $20 per office visit and $50 per emergency room visit. Does not cover Part B excess charges. Generally the right choice for healthy enrollees who prefer lower monthly costs and have few doctor visits.

A federal law that lets you temporarily continue employer-sponsored health coverage after leaving a job, usually for up to 18 months. You pay the full premium plus an administrative fee.

COBRA is not a qualifying event for the Special Enrollment Period. If you plan to rely on COBRA, enroll in Medicare before COBRA begins to avoid a late enrollment penalty.

Health insurance sold through Healthcare.gov (the federal exchange) or a state-run exchange under the Affordable Care Act. ACA Marketplace plans do not qualify you for a Medicare Special Enrollment Period — once you are eligible for Medicare, continuing a Marketplace plan instead of enrolling can result in a late enrollment penalty.

An employer or union health plan covering active employees and their dependents. GHP coverage through a large employer (20 or more employees) qualifies for a Medicare Special Enrollment Period and makes the employer plan the primary payer. Coverage through a small employer (fewer than 20 employees) does not — Medicare becomes the primary payer even while you are still working.

Health coverage for active-duty and retired U.S. military service members, their families, and survivors, administered by the Department of Defense. Military retirees must enroll in Medicare Part B when they turn 65 to keep their TRICARE coverage, which then converts to TRICARE for Life — a supplemental plan that pays after Medicare.

The monthly amount you pay for health coverage, regardless of whether you use any services. Part A is often premium-free; Part B has a standard monthly premium adjusted annually by CMS.

The amount you pay out-of-pocket for covered services each year before your insurance begins to pay. Medicare Part A and Part B each have separate deductibles.

A fixed dollar amount you pay for a specific covered service or prescription, such as $20 per doctor visit. Common in Medicare Advantage plans.

Your share of the cost of a covered service, expressed as a percentage. Original Medicare Part B typically covers 80% of approved costs; you pay the remaining 20%.

The most you will pay for covered services in a plan year. Once reached, the plan pays 100% for the rest of the year. Original Medicare has no out-of-pocket maximum; Medicare Advantage plans are required to have one.

Income-Related Monthly Adjustment Amount. A surcharge added to Part B and Part D premiums for beneficiaries whose income exceeds certain thresholds. Based on your federal tax return from two years prior.

A permanent increase to your Part B or Part D monthly premium for enrolling late without a valid reason such as having creditable coverage. The Part B penalty adds 10% for each full 12-month period you were eligible but did not enroll.

The insurer that pays your medical bills first. When you have both Medicare and employer coverage, which pays first depends on your employer's size: 20 or more employees means the employer plan pays first and Medicare pays second; fewer than 20 employees means Medicare pays first (primary) even while you are still actively working.

The insurer that processes a claim after the primary payer has paid its share, covering some or all of the remaining cost. Whether Medicare acts as primary or secondary payer depends on employer size, the type of other coverage, and in some cases disability or ESRD status.

Centers for Medicare & Medicaid Services. The federal agency that administers Medicare, Medicaid, and the Children's Health Insurance Program (CHIP).

Drug coverage from an employer or union that is at least as good as Medicare Part D. Having creditable coverage lets you delay enrolling in Part D without incurring a late enrollment penalty.

The list of prescription drugs covered by a Part D or Medicare Advantage plan. Drugs are organized into tiers (generic, preferred brand, specialty, etc.), with higher tiers typically costing more. Formularies can change annually.

The group of doctors, hospitals, and facilities that have contracted with a Medicare Advantage or Medigap plan to provide services at negotiated rates. Using out-of-network providers may cost significantly more or may not be covered.

A requirement that your insurer approve a service, drug, or procedure before you receive it. Common in Medicare Advantage plans. Without prior authorization, the plan may deny coverage.

State-run programs that help people with limited income and resources pay Medicare costs including premiums, deductibles, and coinsurance. There are four MSP levels with different eligibility thresholds.

A federally funded program that provides free, unbiased Medicare counseling through state and local agencies. SHIP counselors help beneficiaries compare plans, understand enrollment rules, resolve billing issues, and apply for financial assistance programs.

To find your local SHIP office, visit shiphelp.org or call 1-800-MEDICARE.

A trained volunteer or staff member at a State Health Insurance Assistance Program (SHIP) office who provides one-on-one help with Medicare questions at no cost. Counselors are not affiliated with any insurance company and do not sell plans.

To find your local SHIP office, visit shiphelp.org or call 1-800-MEDICARE.

A federal program that pays monthly benefits to people under 65 who have a qualifying disability and sufficient work history. After 24 consecutive months of receiving SSDI benefits, you automatically become eligible for Medicare Parts A and B regardless of age.