Medicare glossary

Every Medicare acronym we use across this site, in plain English. We keep these short on top, longer underneath, with links to the guides where each term actually matters.

AEP — Annual Enrollment Period

October 15 to December 7 each year.

The window when anyone on Medicare can change Medicare Advantage plans, switch between Advantage and Original Medicare, or change Part D plans. Coverage starts January 1.

Enrollment deadlines

Assignment

When a provider accepts Medicare's approved amount as full payment.

Providers who accept assignment can't bill you more than the Medicare-approved amount minus what Medicare pays. Providers who don't can charge up to 15% more (Part B excess charges).

Benefit period (Part A)

Starts the day you're admitted; ends after 60 days out of inpatient care.

Part A uses benefit periods, not calendar years. The deductible resets each new benefit period. There's no annual cap on benefit periods, which is why long or repeated hospital stays can stack deductibles.

Coinsurance

Your percentage share of a cost after the deductible.

On Part B, after you meet the deductible, you typically pay 20% coinsurance and Medicare pays 80%. Medigap and Advantage plans change how that 20% is handled.

Creditable coverage

Health or drug coverage at least as good as Medicare's standard.

Used to determine whether you owe late enrollment penalties. Your employer must give you a creditable coverage notice each year for drug coverage. Get medical and drug creditable-coverage confirmations in writing.

Working past 65

Deductible

What you pay before Medicare or your plan starts paying.

Part A has a benefit-period deductible. Part B has a small annual deductible. Part D plans set their own, capped each year by CMS. Medigap typically covers Part A deductibles and most Part B coinsurance.

Donut hole (coverage gap)

Largely obsolete after the Inflation Reduction Act capped Part D costs.

Historically the Part D coverage phase where you paid a higher share until catastrophic coverage kicked in. The IRA introduced a hard annual out-of-pocket cap, effectively closing the gap.

Dual eligible

Qualifies for both Medicare and Medicaid.

Medicaid usually picks up Medicare cost-sharing for dual-eligibles. Special needs Advantage plans (D-SNPs) are designed for this population.

Extra Help (LIS)

Federal program that lowers Part D costs based on income and assets.

Eligibility was significantly expanded recently. If you qualify, your Part D premium, deductible, and copays drop substantially. Apply through Social Security.

Formulary

A plan's list of covered drugs and their cost tiers.

Formularies change every January. A drug can move tiers, require prior authorization, step therapy, or be removed. Re-check your formulary during every Annual Enrollment Period.

Guaranteed issue

Insurers must sell you a Medigap plan regardless of health.

Available during your initial Medigap Open Enrollment, the 12-month trial right after first joining Advantage, when a plan leaves your area, and other narrow situations. Some states extend guaranteed-issue rules further.

Leaving Medicare Advantage

IEP — Initial Enrollment Period

7-month window around your 65th birthday.

Starts 3 months before the month you turn 65, includes your birthday month, and ends 3 months after. Enroll in Parts A, B, and D during this window to avoid late penalties.

Turning 65 checklist

IRMAA

Income-Related Monthly Adjustment Amount on Part B and Part D.

A surcharge added to Part B and Part D premiums when your MAGI from two years ago crosses certain thresholds. Brackets are cliffs, not slopes. Appealable with Form SSA-44 after qualifying life events.

Medicare IRMAA explained

MAGI

Modified Adjusted Gross Income used for IRMAA.

Your AGI plus tax-exempt interest. Includes Roth conversions, capital gains, and RMDs. Does not include Roth IRA distributions or qualified HSA withdrawals.

MAPD

Medicare Advantage plan that includes Part D drug coverage.

Most Advantage plans are MAPDs. Enrolling in a standalone Part D plan automatically disenrolls you from a MAPD.

Medigap (Medicare Supplement)

Private insurance that fills Original Medicare's gaps.

Standardized plans labeled A, B, C, D, F, G, K, L, M, and N. Same benefits across insurers; only the price varies. Pairs with Original Medicare, not with Advantage.

Medigap Plan G vs Plan N

OEP — Medicare Advantage Open Enrollment Period

January 1 to March 31. Advantage members can switch once.

Different from the Medigap Open Enrollment Period. OEP lets current Advantage enrollees switch plans or return to Original Medicare. You can't use OEP to go from Original Medicare to Advantage.

Original Medicare

Parts A and B, administered by the federal government.

Any U.S. provider who accepts Medicare can treat you. No networks, no referrals, no prior authorizations from a private insurer. Drug coverage requires a separate Part D plan.

Out-of-pocket maximum (MOOP)

Annual cap on what you pay for covered in-network care.

Required on all Medicare Advantage plans. Original Medicare has no out-of-pocket maximum, which is the main reason most people add Medigap.

Part A

Hospital insurance. Usually premium-free.

Covers inpatient hospital, skilled nursing facility (after a qualifying stay), hospice, and some home health. Premium-free if you have 40 quarters of Medicare-taxed work.

What Medicare covers

Part B

Outpatient and physician services.

Doctor visits, outpatient care, preventive services, durable medical equipment. Has a monthly premium for almost everyone, plus an annual deductible and 20% coinsurance.

Part C — Medicare Advantage

Private bundle of Parts A, B, and usually D.

HMO, PPO, PFFS, or SNP. Networks and prior authorizations apply. Includes an annual out-of-pocket maximum and often extra benefits (dental, vision, hearing, fitness).

Part D

Prescription drug coverage.

Private plans regulated by Medicare. Each has its own formulary, tiers, network, and premium. Late enrollment penalty applies if you skip it without creditable drug coverage.

Part D penalty calculator

Prior authorization

Insurer approval required before certain care is covered.

Common on Medicare Advantage plans for imaging, procedures, certain medications, and skilled nursing stays. Not used by Original Medicare for most services.

SEP — Special Enrollment Period

Enrollment window triggered by a qualifying event.

Examples: losing employer coverage, moving out of a plan's service area, your plan leaving Medicare. The Part B SEP for losing employer coverage is 8 months long.

SSA-44

Form to appeal IRMAA after a life-changing event.

Qualifying events: marriage, divorce, death of spouse, work stoppage, work reduction, loss of pension income, employer settlement. Most successful appeals come from recent retirees.