Supplemental Insurance Coverage Medicare Glossary

Medicare terminology can be confusing. Make sense of all the jargon with this handy Medicare glossary from Banner Health. 

  • Annual Notice of Change (ANOC) is a document sent out every fall that explains any changes Medicare plans will be making to coverage, costs and benefits. The changes go into effect in January of each year. 
  • Catastrophic Coverage refers to a change in your Medicare Part D prescription drug coverage when your prescription drug spending has exceeded the upper limit of the coverage gap.  
  • The Centers for Medicare and Medicaid Services (CMS) is the federal agency that manages Medicare and Medicaid.  
  • Coinsurance is the percentage of medical charges you are responsible for paying. If your coinsurance is 10%, you will pay 10% of each medical bill and your health insurance will pay the remaining 90% of the costs.  
  • Copayment, or co-pay, is the flat rate you will pay out of pocket for certain services.  
  • Coverage Gap refers to a change in your Medicare Part D prescription drug coverage when the amount you have spent on prescription drugs reaches a high-dollar range set by Medicare. 
  • Creditable Coverage is health insurance that meets or exceeds the health care coverage offered by Medicare. Individuals who defer enrollment in Medicare must have proof of creditable coverage to avoid late enrollment penalties. 
  • Deductible is the amount you pay out of pocket before your insurance begins to pay its share of the costs.  
  • Drug Tiers are a way that health care plans classify drugs based on their cost. Typically, the higher the tier, the higher the price for the medication. 
  • Dual Eligibility is when an individual qualifies for both Medicare and Medicaid. Dually eligible individuals have the option to enroll in Medicare Advantage Dual Eligible Special Needs Plans (D-SNPs).
  • Enrollment Period is a timeframe when you can enroll in, or make changes to, your Medicare coverage.
  • Evidence of Coverage (EOC) is a document that provides information about what Medicare plans cover and how much you will pay. It is sent in the fall of each year. 
  • FICA Taxes are payroll taxes that are used to pay for Medicare and Social Security.  
  • Formulary is a list of all of the drugs an insurance plan will cover. 
  • Income-Related Monthly Adjustment Amount (IRMAA) is an additional amount people with higher incomes have to pay for Part B and Part D premiums.  
  • Initial Enrollment Period is the seven-month period when individuals turning 65 are first eligible to enroll in Medicare.  
  • Late Enrollment Penalty is a financial penalty you may have to pay if you don’t sign up for Medicare when you are first eligible.  
  • Medicaid is a program that helps with health care costs for people with limited income and resources, regardless of their age.  
  • Medicare is a program started by the federal government to provide health care coverage to people aged 65 and over.  
  • Medicare Advantage, also called Medicare Part C, is health care coverage managed by Medicare-approved private companies.  
  • Medicare Part A is hospital insurance. It covers inpatient hospital stays, skilled nursing facility care, some home health care and hospice care.  
  • Medicare Part B is medical insurance. It covers preventive care, outpatient care, some home health services and durable medical equipment.  
  • Medicare Part C, also called Medicare Advantage, is health care coverage managed by Medicare-approved private companies.  
  • Medicare Part D is prescription drug coverage offered by Medicare-approved private companies. 
  • Medication Therapy Management is a program that provides a consultation to people who are taking multiple prescriptions. It helps to make sure you know how to take your medications safely and that the prescriptions are working to improve your health. 
  • Medigap is Medicare supplemental insurance sold by private companies that can be used to help pay out-of-pocket costs with Original Medicare.  
  • National Coverage Determinations (NCDs) are documents that list the items and services that Medicare can pay for. CMS releases NCDs every year.  
  • Network is a group of health care providers and facilities that have agreed to provide care for the members of a health care plan. 
  • Original Medicare is health care coverage managed by the federal government for people aged 65 and over and some younger people with disabilities or health conditions. Original Medicare includes two parts – Medicare Part A and Medicare Part B. 
  • Out-of-Pocket Expenses are costs that aren’t covered by insurance that you are responsible for paying. Deductibles, co-pays and coinsurance are all out-of-pocket expenses. 
  • Premium is the amount you pay for your health insurance each month. 
  • Primary Insurance is the payer who will process your insurance claims first.  
  • Prior Authorization is a process of requiring health plan approval for a service or prescription before the member can receive it.  
  • Quantity Limit is a limit on the total amount of a drug the plan will cover or a limit on how much the plan will cover in a certain time period. 
  • Railroad Retirement Board is a government agency with responsibilities for benefits for railroad workers and their families.  
  • Secondary Insurance is the payer who will process any claims that were not paid by your primary insurance.  
  • Social Security is a federal program that provides retirement benefits and disability insurance.   
  • Social Security Administration is the federal agency that manages Social Security retirement and disability benefits.   
  • Social Security Disability Insurance (SSDI) is financial assistance for people who are determined to be disabled and are unable to work. 
  • Supplemental Insurance is an additional insurance plan that helps pay for costs not covered by another insurance policy.  
  • Supplemental Security Income (SSI) provides financial assistance to people with a disability or blindness who have income and resources below specific financial limits. SSI payments are also made to people aged 65 and older without disabilities who meet the financial qualifications. 
  • Work Credits refer to the number of quarters an individual has paid FICA taxes.  

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