Understanding Medicare: 20 Terms to Know

October 5, 2021

Medicare is confusing! Every now and then, it’s good to revisit the basics so you stay informed about your health care insurance. This Medicare glossary includes 20 common Medicare terms that you should know as you research Medicare

Medicare Advantage and Prescription Drug Plan Annual Enrollment Period

The time of year where current Medicare beneficiaries can change their Medicare coverage. It occurs every year from Oct. 15 – Dec. 7.

CMS

Acronym for the U.S. Centers for Medicare and Medicaid Services, part of the Department of Health and Human Services. This is the presiding body over Medicare that ensures that coverage is consistent and patients come first.

Coinsurance

The amount of medical costs not covered by a health insurance plan. You must pay this amount even after your deductible is met. Medicare’s coinsurance is roughly 20% of your incurred health care costs.

Copay

A flat amount that is paid to the health care provider at the time of service. You’ve probably encountered a copay during visits to the doctor or dentist.

Deductible

The amount you must pay out-of-pocket each year before your coverage for health care begins. The lower the annual deductible, the higher the monthly premium. Many plans have high-deductible options in order to offer low monthly premiums.

Formulary

The list of prescription drugs that are covered by a Medicare Part D plan. Each drug will fall into a tier that dictates how much of the cost will be paid by insurance. You receive a new formulary each year.

Guaranteed Issue

Rights that you have in some situations when an insurance company must offer you certain Medigap plans. In these situations, insurance carriers must sell you a plan that covers your pre-existing conditions and does not charge more for certain coverages.

Initial Enrollment Period

The 7-month Initial Enrollment Period around your 65th birthday when you first become eligible for Medicare coverage. This period allows you to choose and enroll in Medicare coverage starting 3 months before your birthday month.

Medicare

Sometimes called “Original Medicare” or “Basic Medicare,” this includes Part A (hospital insurance) and Part B (medical insurance) for eligible beneficiaries. Together, these Parts cover about 80% of health care costs.

Medicare Advantage (Part C)

An all-in-one Medicare policy that includes Part A and Part B and often includes other coverage (like prescription drugs, dental, vision, and/or hearing). Medicare Advantage plans are offered by private insurance companies, so plan coverage and all out-of-pocket costs are different.

Medicare Supplement Insurance

Also called “Medigap”, Medicare Supplement Insurance helps fill the “gaps” in Medicare coverage to mitigate costs and offer Medicare beneficiaries peace of mind. This helps you account for the 20% coinsurance that comes with Medicare.

Medicare Advantage and Prescription Drug Plan Annual Enrollment Period

The time of year where Medicare beneficiaries can enroll in or change their Medicare coverage. It occurs every year from Oct. 15 – Dec. 7.

Medicare Advantage Open Enrollment Period

For Medicare Advantage policyholders to make changes to their health insurance. From Jan. 1 – Mar. 31 each year, Medicare Advantage policyholders can make a one-time change in policy or cancel Medicare Advantage in favor of Original Medicare.

Network

Each insurance carrier has its own unique network of providers. While Original Medicare is widely accepted at most providers throughout the country, Medicare Supplement Insurance, Medicare Advantage, and Part D plans will have their own networks because they are administered by private insurance carriers.

Part A

Medicare’s hospital insurance. When you apply to Medicare, you are automatically enrolled in the Part A plan. Part A covers about 80% of your inpatient costs.

Part B

Medicare Part B covers outpatient care, including doctor visits, routine and emergency medical services, and some forms of preventative care.

Part C

See the definition for Medicare Advantage (Part C) above.

Part D

Medicare’s Prescription Drug Coverage. Part D is optional, but it can greatly reduce your out-of-pocket costs, since Medicare does not cover prescription drugs. These plans are provided by private insurance companies and can differ in each state. Be aware: if you don’t enroll in Part D right away, but choose to do so later, late enrollment penalties will apply.

Social Security

An independent agency of the U.S. federal government that administers a social program including retirement, disability, and survivors’ benefits. Chances are you or people you know are part of the social security program.

Special Enrollment Period

Allows you to procure important health care coverage as soon as possible — even outside of Medicare’s designated enrollment periods. When certain situations occur, like loss of employment or a change in marital status, you can qualify for a Special Enrollment Period.

SmartMatch Insurance Agency

An independent agency that uses trained, licensed insurance agents to help you find the right Medicare coverage for you. Our licensed sales agents allow you to directly compare plans from a variety of carriers available in your area. No more researching or shopping on your own — we’ll help you make sure you get the plan that best fits your needs.

We take your health needs and budget into consideration, providing personalized recommendations for each of our clients. Visit our Comparison Shopping tool or call us at (888) 411-7647 TTY: 711 to get started.

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