Amyotrophic Lateral Sclerosis (ALS)

Also known as Lou Gehrig’s disease, ALS is one of two specific diseases qualifying a person for Medicare coverage before age 65.

Annual Election Period (AEP)

The span of October 15 through December 7th of each year where Medicare beneficiaries are able to enroll in a Medicare Advantage or Prescription drug plan for the coming calendar year. All plans take effect January 1st.


A special kind of complaint insureds can make if they disagree with any decision about their health care services—for example, if Medicare doesn’t pay at all or doesn’t pay enough for a service the insured received or would like to receive. This complaint is made to the Medicare health plan or to the Original Medicare plan. There is a special process that must be used to make the complaint.


In Original Medicare, this means a provider agrees to accept Medicare’s fee as full payment.


 Benefit Period

The way that Original Medicare measures your use of hospital and skilled nursing facility (SNF) services. A benefit period begins the day you’re admitted as an inpatient in a hospital or SNF. The benefit period ends when you haven’t gotten any inpatient hospital care (or skilled care in a SNF) for 60 days in a row. If you go into a hospital or a SNF after one benefit period has ended, a new benefit period begins. You must pay the inpatient hospital deductible for each benefit period. There’s no limit to the number of benefit periods.


 Centers for Medicare and Medicaid Services (CMS)

Part of the U.S. Department of Health and Human Services. CMS is the federal agency administering health care programs such as Medicare, Medicaid, and CHIP.


In some Medicare health plans, the amount that insureds pay for each medical service, like a doctor’s visit. A co-payment is usually a set amount paid for a service—for example, $10 to $40 for a doctor visit. Co-payments are also used for some hospital outpatient services in the Original Medicare plan.


The percent of the Medicare-approved amount that insureds must pay after they pay the deductible for Part A and/or Part B. In the Original Medicare plan, the coinsurance payment is a percentage of the cost of the service (like 20 percent).

Consolidated Omnibus Budget Reconciliation Act (COBRA)

The federal law allowing a person to continue employer-based coverage after losing coverage due to qualifying events. The beneficiary is entitled to continue coverage for a limited period of time at his or her own cost.

Coordination of Benefits

The act of determining payment responsibilities between two or more insurance plans.

Creditable Drug Coverage

Coverage that is as good as Medicare drug coverage; entities whose policies include drug coverage must notify their policyholders whether or not their prescription drug coverage is comparable to Medicare coverage in terms of how much the plan pays.



The amount that must be paid for health care before Medicare begins to pay, either for each benefit period for Part A, or for each year for Part B. These amounts typically increase each year.

Durable Medical Equipment (DME)

Medical equipment that is ordered by a doctor for use in the home. These items must be reusable, such as walkers, wheelchairs, or hospital beds.


End-Stage Renal Disease (ESRD)

Kidney failure that is severe enough to require lifetime dialysis or a kidney transplant. One of two specific diagnoses qualifying a person for Medicare coverage before age 65. Eligibility begins on the first day of the first month of dialysis or when the person is hospitalized for a kidney transplant


 Federal Insurance Contributions Act (FICA)

A federal law that requires employees and their employers to pay payroll taxes into a trust fund, which is used to fund the Social Security and Medicare programs.



A complaint about the way a Medicare health plan is giving care. For example, insureds may file a grievance if they have problems with the health care facility (such as cleanliness), staff behavior, or operating hours. Likewise, insureds many file a grievance if they have problems calling the plan. Note that a grievance is not the same as an appeal, which is the way to deal with a complaint about a treatment decision or a service that is not covered (see the definition of appeal).


 Health Maintenance Organization (HMO)

A type of Medicare managed care plan where a group of doctors, hospitals, and other health care providers agree to give health care to Medicare beneficiaries for a set amount of money from Medicare every month. In an HMO, insureds usually must get all of their care from the providers that are part of the plan.

Health Savings Account (HSA)

A special purpose financial account that allows employees to save and pay for qualifying medical expenses on a tax-favored basis.

Home Health Agency

An organization that provides home care services, including skilled nursing care, physical therapy, occupational therapy, speech therapy, and care by home health aides.

Home Health Care

Skilled nursing care and certain other health care that a person gets in his or her home for the treatment of an illness or injury.


 Income Related Monthly Adjustment (IRMAA)

A surcharge added onto the monthly premium for Part B and Part D for those people with income above a certain threshold.

Initial Enrollment Period (IEP)

The first opportunity for active Medicare enrollment. The IEP includes three months before one turns 65, the month of the 65th birthday, and three months after.


 Lifetime Reserve Days

Sixty days that Medicare will pay for when an insured is in a hospital for more than 90 days. These 60 reserve days can be used only once during a lifetime. For each lifetime reserve day, Medicare pays all covered costs except for a daily coinsurance.



A joint federal and state program covering eligible low-income adults, children, pregnant women, elderly adults, and people with disabilities. Programs vary from state to state, but most health care costs are covered if insureds qualify for both Medicare and Medicaid.

Medically Necessary

Services or supplies that are proper and needed to diagnose or treat an insured of his or her medical condition. These services/supplies are provided for the diagnosis, direct care, and treatment of the medical condition; they meet the standards of good medical practice in the medical community of the insured’s local area; and they are not mainly for the insured’s or the doctor’s convenience.

Medicare Advantage Prescription Drug Plan (MAPD)

A Medicare Advantage plan that includes prescription drug coverage in the plan.

Medicare Summary Notice (MSN)

A notice that insureds get after the doctor files a claim for Part A and Part B services in the Original Medicare plan. It explains what the provider billed for, the Medicare-approved amount, how much Medicare paid, and what you must pay. You might also get a notice called a Notice of Utilization.


 Open Enrollment Period (Medigap)

A one-time only, six-month period after insureds enroll in Medicare Part B. Insureds must be age 65 or older, at which time they can buy any Medigap policy they want. They cannot be denied coverage or charged more due to health history during this time.


 Preferred Provider Organization (PPO)

A type of Medicare Advantage plan where the enrollee must use providers which are contracted with the plan (except for an emergency) and may go outside the plan if they are willing to pay more.

Prescription Drug Plan (PDP)

A stand-alone prescription drug plan that includes only Part D benefits.

Primary Care Provider (PCP)

A doctor who is trained to give an insured basic care. The primary care doctor is the doctor an insured sees first for most health problems. The doctor makes sure that insureds get the care they need to stay healthy. The primary care doctor may also talk with other doctors and health care providers about the insured’s care and refer the insured to them. In many Medicare managed care plans, insureds must see their primary care doctor before they can see any other health care provider.


Original Medicare, wherein Medicare pays doctors directly for their services.

Private-Fee-For-Service Plans (PFFS)

A type of Medicare Advantage plan, which until MIPPA 2008 allowed the enrollee to use any provider for services. MIPPA 2008 ordered MA plans to develop networks, which resulted in a large decrease in the number of enrollees in PFFS plans because of the reduction of PFFS plan offerings by the MA companies.


 Railroad Retirement Board (RRB)

A federal administrative agency that administers retirement-survivor and unemployment-sickness benefit programs for railroad workers and their families.


 Skilled Nursing Facilities

A level of care that must be given or supervised by registered nurses. All of an insured’s needs are taken care of with this type of service. Examples of skilled nursing care are intravenous injections, tube feeding, oxygen, and changing sterile dressings on a wound. Any service that could be safely done by an average nonmedical person (or the insured him-or herself) without the supervision of a registered nurse is not considered skilled care.

Social Security Administration (SSA)

The federal administrative agency managing the Social Security program.

State Health Insurance Assistance Program (SHIP)

A state program that gets money from the federal government to give free health insurance counseling and assistance to people with Medicare.