Every field has its jargon, and Medicare coverage and enrollment is worse than most. This glossary covers the 45 terms that come up again and again in our guides and in the questions readers send us. Definitions are short on purpose: enough to unblock you, with links to deeper guides throughout the site when you want the full story.

Allowed Amount

The maximum amount Medicare will pay for a covered service. If your doctor charges more, you may be responsible for the difference unless they accept Medicare assignment.

Annual Enrollment Period

The time each year when you can join, switch, or drop a Medicare Advantage or Part D plan. It typically runs from October 15 to December 7.

Assignment

An agreement where your healthcare provider accepts the Medicare allowed amount as full payment. When providers accept assignment, you typically pay less out of pocket.

Beneficiary

A person who is eligible for and enrolled in Medicare. As a beneficiary, you receive the healthcare coverage and benefits Medicare provides.

Catastrophic Coverage

Extra protection in Part D plans that kicks in after you spend a certain amount on prescriptions. Once you reach this level, your copayments and coinsurance drop significantly.

Center for Medicare and Medicaid Services

The federal agency that runs Medicare, Medicaid, and the Children’s Health Insurance Program. It’s part of the Department of Health and Human Services.

Coinsurance

Your share of the cost for a covered service, expressed as a percentage. For example, if Medicare covers 80 percent, you pay the remaining 20 percent.

Copayment

A fixed amount you pay for a specific healthcare service or prescription. For instance, you might pay 15 dollars for a doctor visit.

Coverage Gap

A period in Part D prescription drug plans where you pay a larger share of drug costs after reaching an initial spending threshold. Many people call this the donut hole.

Deductible

The amount you must pay out of your own pocket for covered services before Medicare or your plan starts helping. Once you meet your deductible, cost sharing usually decreases.

Donut Hole

The coverage gap in Part D drug plans where you’re responsible for a greater portion of prescription costs. The gap closes once your out of pocket spending reaches a certain limit.

Dually Eligible

Someone who qualifies for both Medicare and Medicaid benefits. These individuals typically have lower incomes and may get help paying premiums and cost sharing.

Effective Date

The date when your Medicare coverage or plan enrollment officially begins. Your benefits and costs start on this date.

Enrollment Period

A specific window of time when you can make changes to your Medicare coverage. Missing these deadlines usually means waiting until the next available enrollment period.

Extra Help

A federal program that helps eligible people with low incomes pay for Part D prescription drug coverage. It covers premiums, deductibles, copayments, and coinsurance.

General Enrollment Period

The time from January 1 to March 31 each year when anyone can join Original Medicare or Part B. Enrollment outside this period may result in a permanent penalty.

Grace Period

A short window of time after an enrollment deadline during which you may still be able to make changes. Grace periods vary depending on which Medicare program you’re in.

Guaranteed Issue

A rule that allows you to buy a Medigap policy without medical underwriting or waiting periods in certain situations. For example, you have guaranteed issue rights when dropping a Medicare Advantage plan.

Health Maintenance Organization

A type of Medicare Advantage plan where you must use doctors and hospitals in the plan’s network. You generally need a referral from your primary care doctor to see specialists.

Home Health Care

Medical services provided to you at home, such as nursing care or physical therapy. Medicare Part A covers home health care when you meet certain conditions and have a doctor’s order.

Hospice Care

Specialized care focused on comfort rather than cure for people with terminal illnesses. Medicare Part A covers hospice care without a required deductible or coinsurance.

Initial Enrollment Period

The seven month window when you can first enroll in Medicare without facing late enrollment penalties. It includes your birth month plus three months before and after.

Initial Coverage Limit

The spending threshold in Part D after which you enter the coverage gap. You and your plan combine to cover prescription drug costs up to this amount.

Inpatient

Someone admitted to a hospital or skilled nursing facility for treatment. As an inpatient, you stay overnight and may have different cost sharing than outpatient visits.

Late Enrollment Penalty

An extra amount added to your premium when you don’t enroll in Medicare or a plan when first eligible. The penalty usually lasts for as long as you have coverage.

Limiting Charge

The maximum amount a provider who doesn’t accept assignment can charge you for a covered service. This amount is typically 15 percent above Medicare’s allowed amount.

Medicaid

A joint federal and state health insurance program for people with limited income and resources. Unlike Medicare, Medicaid is not based on age but on financial need.

Medigap

Private supplemental insurance that helps pay for costs that Original Medicare doesn’t cover. It can pay your deductibles, coinsurance, and copayments.

Medicare

The federal health insurance program primarily for people aged 65 and older. It also covers some younger people with disabilities or end stage renal disease.

Medicare Advantage

An alternative to Original Medicare offered by private insurance companies. These plans usually include drug coverage and may offer extra benefits like dental or vision.

Medicare Part A

The part of Medicare that covers inpatient hospital care, skilled nursing facility care, hospice, and home health services. Most people don’t pay a premium for Part A if they or their spouse paid Medicare taxes.

Medicare Part B

The part of Medicare that covers doctor visits, outpatient services, medical equipment, and preventive care. You pay a monthly premium for Part B coverage.

Medicare Part C

The official name for Medicare Advantage plans offered by private insurance companies. Part C is an alternative way to receive your Part A and Part B benefits.

Medicare Part D

The prescription drug coverage part of Medicare offered by private insurance companies. You can add Part D to Original Medicare or get it through a Medicare Advantage plan.

Medicare Savings Programs

State programs that help people with limited income and resources pay their Medicare premiums and cost sharing. Eligibility varies by state and income level.

Medigap Plan

A standardized supplemental insurance policy that works alongside Original Medicare. Each plan letter covers the same benefits regardless of which insurance company offers it.

Network

The group of doctors, hospitals, and other healthcare providers that have agreed to work with a specific insurance plan. Using providers in your plan’s network usually costs you less.

Original Medicare

The traditional fee for service Medicare program run directly by the federal government. It consists of Part A and Part B.

Out of Pocket Maximum

The most you’ll pay in a year for covered services before your insurance covers 100 percent of costs. Once you reach this amount, your plan pays all remaining covered costs.

Outpatient

A patient who receives medical care at a hospital or facility without staying overnight. Outpatient services include doctor visits, emergency room visits, and same day surgery.

Preferred Provider Organization

A type of Medicare Advantage plan where you can see any provider but pay less when using in network doctors. You generally don’t need referrals to see specialists.

Premium

The monthly amount you pay to have health insurance coverage. You must continue paying premiums to keep your coverage active.

Preventive Care

Health services focused on preventing disease rather than treating existing conditions. Medicare covers many preventive services like screenings and vaccinations at no cost to you.

Prior Authorization

Approval you must get from your insurance plan before receiving a service or prescription. Without prior authorization, you may have to pay more or the service won’t be covered.

Qualified Medicare Beneficiary

A person with limited income and resources who qualifies for state help paying their Medicare premiums and cost sharing. A Medicare Savings Program can help cover these costs.