Glossary of Medicare and Insurance Terms

Sometimes, the terminology used regarding insurance, and in particular, Medicare insurance, can be confusing.  Here’s a helpful glossary to help you navigate the complicated language of Medicare insurance.  For even more personalized help and for a better explanation of your options, simply contact My Medicare Solution today!

A copayment is a fixed amount an individual may be required to pay as their portion of the total cost for benefits following any deductibles. Coinsurance is a percentage of the total cost that the individual may be required to pay.

Insurance that can be an equal substitute once someone is eligible for Medicare. This can include your employer coverage, union coverage or your spouse’s employer coverage. If you do not have creditable coverage at the time of eligibility for Medicare and do not enroll into Medicare, you may face penalties and a loss of enrollment options.

Deductible refers to the amount an individual is required to pay for health care or prescriptions before their insurance starts to pay a portion or the whole of their health care or prescription costs.

Certain medical equipment like mobility aids (canes, walkers, wheelchairs), diabetic supplies, Continuous Glucose Monitors (CGMs), Continuous Positive Airway Pressure CPAP machines, oxygen equipment, infusion pumps, hospital beds for the home, traction equipment, nebulizers and more. Medically Necessary DMEs with a prescription from a medical professional can be billed to Medicare Part B.

Extra fees charged by a doctor, provider or supplier that doesn’t accept Medicare assignment. These out-of-pocket costs can be up to 15% more than the Medicare-approved amount for the service provided and be charged directly to you.

A list of prescription drugs that are covered by a specific prescription drug plan. May also be called a ‘drug list’. A formulary will let you know if the prescription drug is covered and on what tier. Prescription Drug Plans generally have a 4, 5, or 6 tier system and the prescription drug will have a different copay or coinsurance based on which tier it is assigned to. Drugs may be assigned by different tiers by different insurance companies, which means your prescription drug may be more or less expensive with different plans even if both plans cover the drug.

In most cases, when the individual applies for a Medicare Supplement/Medigap plan, they can be subject to underwriting (medical question review), which may lead to a denial of coverage. Guaranteed Issue Rights provides a set of specific enrollment periods during which the individual cannot be subject to underwriting, and the insurance carrier is not allowed to impose additional conditional restrictions such as exclusions for pre-existing medical issues.

A dollar amount specified by the insurance carrier which is most you will pay for covered healthcare services and prescription drugs in a plan year, after which your health insurance plan covers 100% of the costs for the rest of the year.

Typically represents one or few insurance companies to sell their specific plans. Usually employed by the insurance company. Focused on the needs of the insurance company.

Represents multiple insurance companies and types of insurance plans. Is usually not an employee of an insurance company, instead they license independently. Focused on the need of the individual seeking coverage, you.

A list of providers and doctors that are contracted with the insurance company. If your doctor is out-of-network, you may be burdened with the entire cost of their care as your insurance may not pay out-of-network. There are two types of networks, Health Maintenance Organization (HMO) and Preferred Provider Organization (PPO). Typically, on an HMO plan you can only use the providers that have contracted with the insurance company. On a PPO plan, your insurance company will still pay a portion of your medical costs if you use a provider or doctor outside the network, but your bill may still be significantly larger out-of-network than in-network.

A decision by your health insurer or plan that a health care service, treatment plan, prescription drug or durable medical equipment is medically necessary. Sometimes called prior authorization, prior approval or precertification. Your health insurance or plan may require preauthorization for certain services before you receive them, except in an emergency.

The monthly cost of the insurance plan. Can also be quarterly, bi-annual, or annual.

A physician, health care professional or health care facility that is licensed, certified and accredited as required by state law. A Primary Care Provider is your main doctor that coordinates your care and provides you with necessary referrals. A Specialist is a physician that focuses on a specific area of medicine.

Permission to see a doctor. A referral is a request made by your primary care physician (PCP) to see another provider, typically a specialist. Some insurance companies require a referral in order for the specialist visit to be a covered benefit. Even if an insurance company does not require a referral, some specialists may ask for a referral.

Coverage options that enable you to expand your basic insurance plan for an additional premium. A common example is a dental rider.

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