Medicare Glossary
Advance Beneficiary Notice (ABN)
A written notice a doctor or supplier gives you BEFORE providing a service, warning that Medicare probably won't pay for it. Signing it means you agree to pay yourself if Medicare refuses. If you were never given an ABN for a service Medicare denies, you often can't be billed for it — which is exactly why providers hand them out.
Annual Enrollment Period (AEP, October 15 – December 7)
The yearly window when anyone with Medicare can join, switch, or drop a Medicare Advantage or Part D drug plan. Changes take effect January 1. This is the season the TV commercials are about — and the one time each year everyone should re-check their plan against the ANOC letter that arrived in September.
Annual Notice of Change (ANOC)
The letter your Medicare Advantage or Part D plan must mail you each September listing everything that changes on January 1 — premium, copays, drug list, provider network. Most people never open it. The plan you liked this year can be a different plan next year, and the ANOC is where it says so.
Assignment
A doctor who “accepts assignment” agrees to take Medicare's approved amount as full payment. A non-participating doctor can charge up to 15% more (an “excess charge”) in most states. Always worth asking a new doctor: “Do you accept Medicare assignment?”
Beneficiary
Simply the person covered by Medicare — you. Official mail, plan documents, and this glossary use the word constantly, so it earns an entry: if a document says “the beneficiary,” it means the person whose name is on the Medicare card.
Benefit Period
How Original Medicare measures hospital stays for Part A. A benefit period starts the day you're admitted and ends once you've been out of the hospital (and not in skilled nursing) for 60 straight days. Each new benefit period starts a fresh $1,736 deductible in 2026 — you can pay it more than once in a year.
COBRA
Temporary continuation of employer health coverage after you leave a job. The trap: COBRA is NOT “coverage based on current employment,” so it does not delay your Part B deadline. Taking COBRA past 65 without enrolling in Part B can mean a late penalty and months without coverage. Drug coverage under COBRA may count as creditable for Part D — the plan must tell you.
Coinsurance
Your share of a covered service expressed as a percentage. Under Original Medicare Part B, after the deductible you typically pay 20% of the approved amount and Medicare pays 80% — with no yearly cap unless you have a Medigap policy or other coverage that picks it up.
Copayment (Copay)
Your share of a covered service expressed as a fixed dollar amount — say, a set fee per doctor visit or per prescription. Medicare Advantage plans mostly use copays; Original Medicare mostly uses coinsurance percentages.
Creditable Coverage
Drug coverage at least as good as a standard Part D plan — commonly through an employer, union, the VA, or TRICARE. Months with creditable coverage don't count toward a Part D late penalty. Your plan must tell you in writing each year whether its coverage is creditable. Keep those letters; they are your proof.
Custodial Care
Help with daily living — bathing, dressing, eating, toileting — when that's the only care you need. The hard truth most families learn late: Medicare does NOT pay for custodial care, including most nursing-home and assisted-living stays. Medicare covers skilled care (nurses, therapy); long stays that are custodial fall to you, long-term-care insurance, or Medicaid.
Deductible
What you pay before your coverage starts paying. In 2026, Original Medicare's Part B deductible is $283 per year, and the Part A hospital deductible is $1,736 per benefit period (not per year — see Benefit Period). Part D plans set their own deductible up to a federal maximum.
Dual Eligible
Someone who qualifies for BOTH Medicare and Medicaid at the same time. Medicaid can pick up premiums and cost-sharing Medicare leaves behind, and dual-eligible seniors usually qualify for Extra Help with drug costs automatically. Special Medicare Advantage plans (D-SNPs) are designed specifically for this group.
Durable Medical Equipment (DME)
Medically necessary equipment for home use that your doctor orders — walkers, wheelchairs, hospital beds, oxygen, CPAP machines, blood-sugar monitors. Part B typically covers 80% of the approved amount after the deductible, from suppliers enrolled in Medicare.
Evidence of Coverage (EOC)
The thick legal document a Medicare Advantage or Part D plan publishes each year describing exactly what is covered, what it costs, and how to appeal. When a plan's glossy brochure and the EOC disagree, the EOC wins — it's the contract.
Excess Charges
The up-to-15% extra a doctor who doesn't accept Medicare assignment can bill above the Medicare-approved amount, in most states. Some states ban them. Medigap Plan G covers them; Plan N does not — one of the real differences between those two popular plans.
Explanation of Benefits (EOB)
The monthly statement from a Medicare Advantage or Part D plan showing what was billed, what the plan paid, and what you may owe. It is not a bill. Reading it is how you catch billing errors and services you never received — one of the simplest fraud checks there is. (Original Medicare's version is the Medicare Summary Notice.)
Extra Help (Low-Income Subsidy, LIS)
A federal program that pays most Part D drug-plan premiums and sharply lowers what you pay per prescription — worth thousands a year to many who qualify. It also erases any Part D late-enrollment penalty entirely. Qualifying is based on income and assets, and far more people qualify than apply.
Formulary
A drug plan's list of covered medications, organized into cost tiers. If your drug isn't on the plan's formulary, the plan generally won't pay for it. Formularies change every year — checking your own prescriptions against the formulary is THE most important step in picking or keeping a Part D plan.
General Enrollment Period (GEP, January 1 – March 31)
The fallback window to sign up for Part B if you missed your Initial Enrollment Period and don't qualify for a Special Enrollment Period. Coverage starts the month after you enroll — and the Part B late penalty usually applies, permanently.
Guaranteed Issue Rights (Medigap Protections)
Situations where an insurance company must sell you a Medigap policy with no health questions — for example, during the 6 months after you first get Part B at 65, or when certain other coverage ends. Outside these windows, Medigap insurers in most states can review your health and decline you. Timing matters more with Medigap than with anything else in Medicare.
Health Maintenance Organization (HMO)
A Medicare Advantage plan type where you use the plan's network of doctors and hospitals, usually pick a primary care doctor, and typically need referrals to see specialists. Out-of-network care generally isn't covered except in emergencies. Often lower premiums in exchange for less flexibility.
High-Deductible Plan G (HD-G)
A version of Medigap Plan G with a much lower premium in exchange for a yearly deductible you pay before the plan starts covering Medicare's gaps. Same standardized benefits after the deductible. A trade of monthly certainty for a capped yearly risk — right for some budgets, wrong for others.
Home Health Care
Part-time skilled care at home — nursing, physical therapy, speech therapy — that Medicare covers when a doctor orders it and you're homebound. It does not cover 24-hour care, meals, or help with daily living when that's the only care needed (see Custodial Care).
Hospice
Comfort-focused care for a terminal illness (life expectancy of 6 months or less as certified by a doctor), covering the team, medications for symptom relief, equipment, and family support — almost entirely paid by Part A, usually at home. Choosing hospice means treatment aims at comfort rather than cure; you can stop hospice at any time.
HSA and Medicare (Health Savings Account)
Once ANY part of Medicare starts (even just Part A), you can no longer contribute to a Health Savings Account — and because Part A can be backdated up to 6 months when you enroll after 65, working contributors need to stop HSA contributions 6 months before enrolling. You can always SPEND existing HSA money, including on Medicare premiums.
Initial Enrollment Period (IEP)
Your first window to enroll in Medicare: 7 months built around your 65th birthday — the 3 months before your birthday month, the month itself, and the 3 months after. Enrolling in the 3 early months means coverage starts the first day of your birthday month. Missing the window entirely can mean penalties and a wait.
Inpatient vs. Observation Status
You can spend nights in a hospital bed without being formally “admitted” — that's observation status, billed under Part B, not Part A. It matters enormously for one reason: Medicare only covers skilled nursing facility care after a 3-day INPATIENT stay. Ask directly: “Am I admitted as an inpatient, or under observation?”
IRMAA (Income-Related Monthly Adjustment Amount)
A surcharge added to Part B and Part D premiums for higher incomes — in 2026 it starts above $109,000 of income for a single filer ($218,000 filing jointly). The catch everyone misses: it's based on your tax return from TWO years ago, so a high-income year just before retiring can follow you into Medicare. A drop in income from a “life-changing event” like retirement can be appealed on form SSA-44.
Late Enrollment Penalty (Part B)
10% added to your Part B premium for each full 12-month period you could have had Part B but didn't sign up — and it lasts for as long as you have Part B. Months covered by an employer plan from CURRENT work don't count (COBRA and retiree coverage do count against you).
Late Enrollment Penalty (Part D)
1% of the national base premium ($38.99 in 2026) added to your drug-plan premium for each full month you went without creditable drug coverage after your IEP, beyond a 63-day grace period. It never goes away — but creditable months don't count, and Extra Help erases the penalty completely.
Lifetime Reserve Days
An extra 60 hospital days Part A gives you for stays longer than 90 days in one benefit period — with a high daily coinsurance, and once used, they never renew. They are the deep reserve tank, not a renewable benefit.
MAGI (Modified Adjusted Gross Income)
The income measure Social Security uses to set IRMAA surcharges: your adjusted gross income plus tax-exempt interest. Roth withdrawals don't count; traditional IRA/401(k) withdrawals, capital gains, and even municipal-bond interest do. Managing MAGI in the two years before Medicare is a legitimate planning lever.
Medicaid
The state-run health program for people with limited income and assets — separate from Medicare, and the two can work together (see Dual Eligible). For seniors, Medicaid is also the main payer of long-term nursing-home care, which Medicare does not cover. Rules and limits vary by state.
Medically Necessary
The standard Medicare uses to decide whether it pays: services or supplies needed to diagnose or treat an illness or injury, meeting accepted standards of medicine. It's the phrase behind most coverage denials — and most successful appeals argue the care met exactly this standard.
Medicare Advantage (Part C)
The alternative way to receive your Medicare benefits: a private plan (HMO, PPO, and others) that replaces how you use Original Medicare, usually bundling drug coverage and often adding dental, vision, or hearing benefits. Plans typically use provider networks and set their own copays, with a yearly out-of-pocket maximum. You keep paying your Part B premium.
Medicare Savings Programs (QMB, SLMB, QI)
State programs that pay the Part B premium — and, in the most generous version (QMB), deductibles and copays too — for people with limited income and assets. Qualifying for any of them also brings Extra Help for drug costs automatically. Applications go through your state Medicaid office.
Medicare Summary Notice (MSN)
The statement Original Medicare mails every 3 months (or shows online anytime) listing services billed to Medicare, what it paid, and what you may owe. Not a bill. Like the EOB, it's your fraud and error check — question anything you don't recognize.
Medigap (Medicare Supplement)
Private insurance that pays the deductibles and 20% coinsurance Original Medicare leaves with you. In most states plans are standardized by letter (G and N are the common choices for new enrollees) — a Plan G is the same coverage at every company, so companies compete on price and service; Massachusetts, Minnesota, and Wisconsin standardize their plans differently. Works alongside Original Medicare: any doctor who takes Medicare, no networks, no referrals. You'll want a separate Part D plan for drugs.
Network
The doctors, hospitals, and pharmacies a plan contracts with. Medicare Advantage plans use networks (care outside them costs more or isn't covered, except emergencies); Original Medicare has none — any provider in the country that accepts Medicare. Networks can change mid-year even when you can't change plans, so verify YOUR doctors every fall.
Open Enrollment Period (Medicare Advantage) (OEP, January 1 – March 31)
A one-time-per-year do-over for people already IN a Medicare Advantage plan: switch to a different MA plan, or drop back to Original Medicare (with a Part D plan), once. It is not open season — you can't join MA for the first time, and people on Original Medicare can't use it at all.
Original Medicare
Part A (hospital) plus Part B (medical), run directly by the federal government. Any doctor in the country who accepts Medicare, no networks, no referrals — but no cap on your 20% share and no drug coverage, which is why it's commonly paired with a Medigap policy and a Part D plan.
Out-of-Pocket Maximum (MOOP)
The most a Medicare Advantage plan can make you pay in a year for covered medical services — after you hit it, the plan pays 100%. Every MA plan has one; Original Medicare has NONE (that cap is what Medigap provides). When comparing MA plans, the maximum matters more than the premium: it's your bad-year number.
Part A (Hospital Insurance)
Covers inpatient hospital stays, skilled nursing facility care after a qualifying hospital stay, hospice, and some home health care. Premium-free for most people (10+ years of work in the U.S.), with a $1,736 deductible per benefit period in 2026.
Part B (Medical Insurance)
Covers doctor visits, outpatient care, preventive services, lab tests, and durable medical equipment. In 2026 the standard premium is $202.90/month (more at higher incomes — see IRMAA) with a $283 yearly deductible, then Medicare pays 80% of approved amounts.
Part D (Prescription Drug Coverage)
Drug coverage through private plans — either a standalone plan alongside Original Medicare or built into a Medicare Advantage plan. Since 2025, yearly out-of-pocket drug costs are capped ($2,100 in 2026), which retired the old “donut hole” coverage gap. Even people taking no medications usually enroll in something — going without triggers a permanent late penalty.
Preferred Provider Organization (PPO)
A Medicare Advantage plan type with a network you're encouraged — but not required — to use: out-of-network care is covered at a higher cost to you. Usually no referrals needed. More flexibility than an HMO, generally at a higher premium or cost-sharing.
Private Fee-for-Service (PFFS)
A less common Medicare Advantage type where the plan (not Medicare) sets what it pays providers and what you pay. You can see any provider who accepts the plan's terms — but a provider can decide visit-by-visit whether to accept them, so confirm before each appointment.
Skilled Nursing Facility (SNF)
Rehabilitation-level care after a hospital stay — nursing, physical therapy, wound care. Part A covers it only after a 3-day inpatient hospital stay (see Inpatient vs. Observation), fully for the first 20 days, then with a significant daily coinsurance through day 100. Beyond 100 days, or when care becomes custodial, Medicare stops paying.
Special Enrollment Period (SEP)
A personal enrollment window triggered by a life event — leaving employer coverage after 65, moving out of your plan's area, your plan shutting down, moving into a nursing home, gaining Medicaid or Extra Help, or a declared disaster. Each SEP has its own clock and rules. The employer-coverage SEP is the big one: it's what lets people work past 65 without penalties.
Special Needs Plan (SNP)
A Medicare Advantage plan limited to — and designed around — a specific group: people with both Medicare and Medicaid (D-SNP), certain chronic conditions like diabetes or heart failure (C-SNP), or people living in institutions (I-SNP). Benefits, networks, and drug lists are tailored to that group's needs.
Star Ratings
Medicare's own 1-to-5-star quality scores for Medicare Advantage and Part D plans, updated each fall, measuring things like preventive care, managing chronic conditions, and customer service. A 5-star plan can be joined once anytime during the year through a special enrollment period. Stars measure the plan overall — not whether it covers YOUR doctors and drugs.
State Health Insurance Assistance Program (SHIP)
Free, unbiased Medicare counseling in every state, funded by the federal government and staffed largely by trained volunteers. SHIP counselors don't sell anything. A licensed agent and a SHIP counselor answer different needs — an agent can enroll you and is paid by insurance carriers; SHIP offers advice with nothing to sell. Both are legitimate places to get help.
Trial Right
A built-in escape hatch: if you join a Medicare Advantage plan when first eligible at 65, you have 12 months to change your mind, return to Original Medicare, and buy a Medigap policy with no health questions. Certain first-time switches from Medigap to MA carry a similar 12-month right to return. After the trial window, Medigap in most states can medically underwrite you.
TRICARE for Life (TFL)
The military-retiree wraparound to Medicare: once you have Parts A and B, TRICARE for Life pays after Medicare, usually leaving little to nothing — with pharmacy coverage that counts as creditable for Part D. Enrolling in Part B on time is essential; TFL doesn't work without it.
TTY
Text-telephone service for people who are deaf, hard of hearing, or have speech difficulties. Dialing 711 connects you to a relay operator who bridges the call. Medicare requires plan and agency phone lines to publish a TTY number — ours is 711, listed alongside every phone number on this site.
Underwriting (Medical)
An insurance company reviewing your health history to decide whether to cover you and at what price. Medicare itself and Medicare Advantage plans never underwrite. Medigap does — except during your one-time open enrollment window at 65 and guaranteed-issue situations, which is why WHEN you buy Medigap matters as much as which plan.
VA Benefits and Medicare
VA health care and Medicare are separate systems that don't pay each other's bills: VA covers care at VA facilities, Medicare covers civilian care. Many veterans carry both for flexibility. VA drug coverage counts as creditable for Part D. The Part B decision deserves care — going without it means little coverage outside the VA system, and a penalty if you enroll later.