Medicare Terms
The following terms are from the “Words to Know” section of the Guide to Health Insurance For People With Medicare.
Assignment: In the Original Medicare Plan, this means a doctor agrees to accept Medicare’s fee as full payment. If you are in the Original Medicare Plan, it can save you money if your doctor accepts assignment. You still pay your share of the cost of the doctor’s visit.
Benefit Period: The way that Medicare measures your use of hospital and skilled nursing facility services. A benefit period begins the day you go to a hospital or skilled nursing facility. The benefit period ends when you haven’t received hospital or skilled nursing care for 60 days in a row. If you go into the hospital after one benefit period has ended, a new benefit period begins. You must pay the inpatient hospital deductible for each benefit period. There is no limit to the number of benefit periods you can have.
Coinsurance: The percent of the Medicare-approved amount that you have to pay after you 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%).
Copayment: In some Medicare health plans, the amount you pay for each medical service, like a doctor visit. A copayment is usually a set amount you pay for a service. For example, this could be $5 or $10 for a doctor visit. Copayments are also used for some hospital outpatient services in the Original Medicare Plan.
Deductible: The amount you must pay for health care, before Medicare begins to pay, either for each benefit period for Part A, or each year for Part B. These amounts can change every 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. DME is paid for under Medicare Part B, and you pay 20% coinsurance in the Original Medicare Plan.
Durable Medical Equipment Regional Carrier (DMERC): A private company that contracts with Medicare to pay bills for durable medical equipment.
End-Stage Renal Disease (ESRD): Kidney failure that is severe enough to require lifetime dialysis or a kidney transplant.
Excess Charges*: The difference between a doctor’s or other health care provider’s actual charge (which may be limited by Medicare or the state) and the Medicare-approved payment amount. *This definition in whole or in part was used with permission from Walter Feldesman, Esq., “Dictionary of Eldercare Terminology 2000.”
Fiscal Intermediary: A private company that has a contract with Medicare to pay Part A and some Part B bills. (Also called “Intermediary.”)
Guaranteed Issue Rights (also called “Medigap Protections”): Rights you have in certain situations when insurance companies are required by law to sell or offer you a Medigap policy. In these situations, an insurance company can’t deny you insurance coverage or place conditions on a policy, must cover you for all pre-existing conditions, and can’t charge you more for a policy because of past or present health problems.
Guaranteed Renewable: A right you have that requires your insurance company to allow you to automatically renew or continue your Medigap policy, unless you commit fraud or do not pay your premiums.
Home Health Care: Skilled nursing care and certain other health care you get in your home for the treatment of an illness or injury.
Hospice Care: A special way of caring for people who are terminally ill, and for their family. This care includes physical care and counseling. Hospice care is covered under Medicare Part A (Hospital Insurance).
Lifetime Reserve Days: Sixty days that Medicare will pay for when you are in a hospital for more than 90 days. These 60 reserve days can be used only once during your lifetime. For each lifetime reserve day, Medicare pays all covered costs except for a daily coinsurance ($ 406 in 2002).
Limiting Charge: The highest amount of money you can be charged for a covered service by doctors and other health care providers who don’t accept assignment. The limit is 15% over Medicare’s approved amount. The limiting charge only applies to certain services and does not apply to supplies or equipment.
Long-Term Care: A variety of services that help people with health or personal needs and activities of daily living over a long period of time. Long-term care can be provided at home, in the community, or in various types of facilities, including nursing homes and assisted living facilities. Most long-term care is “custodial care.” Medicare does not pay for this type of care.
Medicaid: A joint federal and state program that helps with medical costs for some people with low incomes and limited resources. Medicaid programs vary from state to state, but most health care costs are covered if you qualify for both Medicare and Medicaid.
Medical Underwriting: The process that an insurance company uses to decide whether or not to take your application for insurance, whether or not to add a waiting period for pre-existing conditions (if your state law allows it), and how much to charge you for that insurance.
Medically Necessary: Services or supplies that:
- are proper and needed for the diagnosis or treatment of your medical condition;
- are provided for the diagnosis, direct care, and treatment of your medical condition;
- meet the standards of good medical practice in the medical community of your local area; and
- are not mainly for the convenience of you or your doctor.
Medicare-Approved Amount: The fee Medicare sets as reasonable for a covered medical service. This is the amount a doctor or supplier is paid by you and Medicare for a service or supply. It may be less than the actual amount charged by a doctor or supplier. The approved amount is sometimes called the “Approved Charge.”
Medicare Managed Care Plan: These are health care choices (like HMOs) in some areas of the country. In most plans, you can only go to doctors, specialists, or hospitals on the plan’s list. Plans must cover all Medicare Part A and Part B health care. Some plans cover extras, like prescription drugs. Your costs may be lower than in the Original Medicare Plan.
Medicare SELECT: A type of Medigap policy that may require you to use hospitals and, in some cases, doctors within its network to be eligible for full benefits.
Open Enrollment Period (Medigap): A one-time-only six month period when you can buy any Medigap policy you want that is sold in your state. It starts when you sign up for Medicare Part B. You cannot be denied coverage or charged more due to past or present health problems during this period.
Pre-Existing Condition (Medigap): A health problem you had before the date that a new insurance policy starts.
Programs of All-inclusive Care for the Elderly (PACE): PACE combines medical, social, and long-term care services for frail people. PACE is available only in states that have chosen to offer it under Medicaid. To be eligible, you must:
- Be 55 years old or older,
- Live in the service area of the PACE program,
- Be certified as eligible for nursing home care by the appropriate state agency, and
- Be able to live safely in the community.
The goal of PACE is to help people stay independent and living in their community as long as possible, while getting high quality care they need.
Premium: The periodic payment to Medicare, an insurance company, or a health care plan for health care coverage.
Original Medicare Plan: A pay-per-visit health plan that lets you go to any doctor, hospital, or other health care provider who accepts Medicare. You must pay the deductible. Medicare pays its share of the Medicare-approved amount, and you pay your share (coinsurance). The Original Medicare Plan has two parts: Part A (Hospital Insurance) and Part B (Medical Insurance).
Medigap Policy: A Medicare supplement insurance policy sold by private insurance companies to fill “gaps” in Original Medicare Plan coverage. Except in Massachusetts, Minnesota, and Wisconsin, there are 10 standardized plans labeled Plan A through Plan J. Medigap policies only work with the Original Medicare Plan.
Medicare Private Fee-for-Service Plan: A private insurance plan that accepts people with Medicare. You may go to any Medicare-approved doctor or hospital that accepts the plan’s payment. The insurance plan, rather than the Medicare program, decides how much it will pay and what you pay for the services you get. You may pay more for Medicare-covered benefits. You may have extra benefits the Original Medicare Plan does not cover.
Medicare Carrier: A private company that has a contract with Medicare to pay Part B bills.
Medicare Advantage Plan: A health plan, such as a Medicare managed care plan or Private Fee-for-Service plan, offered by a private company and approved by Medicare. An alternative to the Original Medicare Plan.
- Be 55 years old or older,
- Live in the service area of the PACE program,
- Be certified as eligible for nursing home care by the appropriate state agency, and
- Be able to live safely in the community.
Skilled Nursing Care: A level of care that must be given or supervised by Registered Nurses. All of your needs are taken care of with this type of service. Examples of skilled care are: getting intravenous injections, tube feeding, oxygen to help you breathe, and changing sterile dressings on a wound. Any service that could be safely done by an average non-medical person (or one’s self) without the supervision of a Registered Nurse is not considered skilled care.
State Health Insurance Assistance Program: A state program that gets money From the Federal Government to give free health insurance counseling and assistance to people with Medicare.
State Medical Assistance Office: A state agency that is in charge of the State’s Medicaid program and can provide information about programs to help pay medical bills for people with low incomes. Also provides help with prescription drug coverage.
State Insurance Department: A state agency that regulates insurance and can provide information about Medigap policies and any insurance-related problem.
Skilled Nursing Facility: A nursing facility with the staff and equipment to give skilled nursing care and/ or skilled rehabilitation services and other related health services.