Medicare Glossary
Medicare can be confusing. Our glossary explains common terms in plain English so you can make informed decisions about your coverage.
A
Annual Enrollment Period (AEP)
The Annual Enrollment Period runs from October 15 to December 7 each year. During this time, you can switch Medicare Advantage plans, switch to Original Medicare, or change Part D plans.
C
Copayment
A copayment (copay) is a fixed amount you pay for a covered service, like $20 for a doctor visit. Different services may have different copayments.
Coinsurance
Coinsurance is the percentage of costs you pay for covered services after you've met your deductible. For example, if your coinsurance is 20%, you pay 20% and Medicare pays 80%.
Creditable Coverage
Creditable coverage is prescription drug coverage that's at least as good as Medicare Part D. If you have it, you can delay Part D enrollment without penalty.
D
Donut Hole
The donut hole (coverage gap) is a temporary limit on what the drug plan will cover. Once you reach this limit, you pay a higher percentage of drug costs until you reach catastrophic coverage.
Deductible
A deductible is the amount you pay for covered services before your insurance starts to pay. Medicare has separate deductibles for Part A, Part B, and Part D.
F
Formulary
A formulary is a list of prescription drugs covered by a Medicare drug plan. Drugs are organized into tiers, with different cost-sharing for each tier.
I
Initial Enrollment Period (IEP)
The Initial Enrollment Period is the 7-month window when you first become eligible for Medicare, usually around your 65th birthday. It includes 3 months before, the month of, and 3 months after your birthday.
M
Medicare Advantage
Medicare Advantage (Part C) is an alternative to Original Medicare offered by private insurance companies approved by Medicare. These plans include Part A, Part B, and usually Part D coverage in one plan.
Medigap
Medigap (Medicare Supplement Insurance) is private health insurance that helps pay some of the health care costs that Original Medicare doesn't cover, like copayments, coinsurance, and deductibles.
Maximum Out-of-Pocket (MOOP)
The maximum out-of-pocket is the most you pay in a year for covered services. Once you reach this limit, your plan pays 100% of covered costs for the rest of the year.
P
Part D
Medicare Part D is prescription drug coverage. You can get it through a standalone Prescription Drug Plan (PDP) or through a Medicare Advantage plan that includes drug coverage.
Premium
A premium is the monthly payment you make for your Medicare coverage. You pay premiums for Part B, Part D, Medicare Advantage, and Medigap plans.
Prior Authorization
Prior authorization is approval you must get from your plan before certain services or drugs will be covered. Without it, the plan may not pay for the service.
S
Special Enrollment Period (SEP)
A Special Enrollment Period is a time outside of the normal enrollment periods when you can make changes to your Medicare coverage due to certain life events like moving or losing other coverage.
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