Glossary of Medicare, Medicare Advantage
and Medigap Insurance Terms

Actual charge
The amount of money a doctor or supplier charges for a certain medical service or supply. This amount is often more than the amount Medicare approves.
Annual election period (AEP)
An annual period during which Medicare beneficiaries may enroll in or disenroll from a Medicare Advantage plan. The AEP occurs November 15 through December 31 each year. The plan coverage becomes effective on January 1 of the coming year.
Appeal
An appeal is a special kind of complaint you make if you disagree with any decision to deny a request for health care services or payment for services you already received. You may also make a complaint if you disagree with a decision to stop services that you are receiving. For example, you may ask for an appeal if Medicare does not pay for or provide an item or service you think you should be able to get. There is a special process you must use to make your complaint.
Approved amount or charge
Also called the allowable, eligible, or accepted charge, this is the maximum fee set by Medicare that it will approve for a particular service or procedure, of which Medicare will reimburse 80%.
Assignment
This means that a doctor agrees to accept Medicare's fee as full payment. Accepting assignment means that the doctor agrees to bill no more than the approved charge for a service. In other words, a doctor will not charge more than Medicare will approve.
Attained age
This means that as you age, your premiums will change to meet your age range and your premiums will become higher.
Beneficiary
The name for a person who has health insurance through the Medicare program.
Benefit appeal
The opportunity for the Medicare beneficiary to submit a written request for review by the insurer of the denial of a claim for Wisconsin mandated benefits under the Medicare supplement policy.
Benefit determination
A decision from the Medicare managed care plan to offer coverage under the provisions of the policy. The benefit could require a deductible or copayment. The benefit could also be limited to a certain amount by the plan.
Benefit period
A designated period of time during and after a hospitalization for which Medicare Part A will pay benefits.
Carrier
A private company that has a contract with Medicare to process your Medicare Part B bills.
Centers for Medicare & Medicaid Services (CMS)
The federal agency that runs the Medicare program.
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. If you have supplemental coverage, this is the balance of a covered health expense that you are required to pay after insurance has covered the rest.
Coordinated care plan
Any form of Medicare Advantage plan that relies on a provider network to deliver care to enrollees, including HMOs and other managed care plans. Most coordinated care plans will make you pay for all or part of the cost of using a provider who is not part of their network.
Copayment
The amount that you pay for each medical service. A copayment is usually a set amount you pay for a service. For example, this could be $10 or $20 for a doctor's visit.
Coverage
Services that meet the plan requirements for reimbursement. A medical service is not necessarily covered, even if your health care provider says you need it, unless the service meets the terms of the health plan.
Creditable coverage
The Medicare Modernization Act (MMA) imposes a late enrollment penalty on individuals who do not maintain creditable drug coverage (coverage that is at least as good as Part D coverage) for a period of 63 days or longer following their initial enrollment period for the Medicare prescription drug benefit. MMA mandates that health plans offering prescription drug coverage disclose to all Medicare eligible individuals with prescription drug coverage whether such coverage is creditable. Individuals should retain this document for their records. For more information on creditable coverage as it relates to Part D, go to www.cms.hhs.gov/CreditableCoverage/01_Overview.asp.
Custodial care
Personal care, such as help with activities of daily living, like bathing, dressing, eating, getting in and out of a bed or chair, moving around, and using the bathroom. It may also include care that most people do themselves, like using eye drops. Medicare does not pay for custodial care.
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.
Disenrollment
Leaving a Medicare managed care plan to go to another health plan. There are certain plan rules that must be followed in order to leave the plan officially. Your disenrollment will be effective the first of the month following the submission of your disenrollment form.
Disenrollment form
The form necessary to submit to your present Medicare managed care plan indicating your decision to leave the plan. This could be a simple written statement from you to the insurance company, or you can get this form from your local Social Security office or from the plan in which you are presently enrolled.
Drug formulary
A formulary is a list of generic and brand name prescription drugs that are covered by your insurance policy or health plan.
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.
Durable Medical Equipment Regional Carrier
A private company that contracts with Medicare to pay bills for durable medical equipment.
Emergency services
Services delivered by an appropriately trained health care professional that are required to diagnose and stabilize an emergency condition.
Enrollment period
The 6-month period after you turn 65, during which you can enroll in any Medicare supplement insurance plan or policy if you have enrolled in Medicare Part B. During this period, you cannot be denied coverage based on any preexisting medical condition.
Excess charge
The difference between a doctor's or other health care provider's actual charge and the Medicare-approved payment amount.
Explanation of Medicare benefits (EOMB)
A notice that is sent to you after the doctor files a claim for Part B services that explains what the provider billed, the Medicare-approved amount, how much Medicare paid, and the amount you must pay.
Fiscal intermediary
A private company that has a contract with Medicare to pay Part A and some Part B bills. (Also called "intermediary").
Free look period
The 30-day period of time when you can review a Medicare supplement policy. If you change your mind about keeping the policy during this 30-day period, you can cancel the policy and get your money back.
Grievance
Your right under Wisconsin insurance law to file a written complaint regarding any dissatisfaction with your policy or plan regarding mandated benefits. Medicare also provides you the right to file a grievance if you have a problem calling the plan, staff behavior, or operating hours. Medicare has a separate appeal process for complaints about a treatment decision or a service that is not covered.
Guaranteed issue rights
Rights you have in certain situations when insurance companies are required to accept your application for a Medicare supplement policy. In these situations, an insurance company cannot deny you insurance coverage or place conditions on a policy, must cover you for all preexisting conditions, and cannot charge you more for a policy because of past or present health problems.
Guaranteed renewable
A right you have to automatically renew or continue your Medicare supplement policy, unless you commit fraud or do not pay your premiums.
Issue age
Premiums are set at the age you are when you buy the policy and will not increase because you get older. Premiums may increase for other reasons.
Limiting charge
The maximum a doctor or other provider who does not accept assignment may legally charge for a Medicare-covered service.
Long-term care
A variety of services that help people with health or personal needs and activities of daily living over a 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 if this is the only kind of care you need.
Managed care
A health plan that has an established network of providers that you must use.
Managed care plan
In most managed care plans, you can only go to doctors, specialists, or hospitals on the plan's list except in an emergency. Plans must cover all Medicare Part A and Part B health care. Some managed care plans cover extra benefits, like extra days in the hospital. In most cases, a type of Medicare Advantage Plan that is available in some areas of the country. Your costs may be lower than in the Original Medicare Plan.
Mandatory supplemental benefits
Additional benefits included in Medicare coordinated care plans that are required to be purchased by you. These benefits will differ among Medicare Advantage plans.
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.
Medically necessary
Services or supplies that are 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 local area; and are not mainly for the convenience of you or your doctor.
Medicare Advantage eligible individual
Anyone eligible for Medicare Part A and enrolled in Medicare Part B who is not receiving end stage renal disease (ESRD) benefits.
Medicare Advantage Organization
A private or public entity that agrees to meet the contractual requirements to offer a Medicare Advantage health plan. A Medicare Advantage organization may offer more than one plan or type of plan.
Medicare Advantage Plan (also referred to as Medicare Part C)
A private health plan offered by a Medicare Advantage organization.
Medicare-approved amount
In the Original Medicare Plan, this is the Medicare payment amount for an item or service. This is the amount a doctor or supplier is paid by Medicare and you 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 Part A
Commonly known as hospitalization insurance. It pays your hospital bills and certain skilled nursing facility expenses. It also provides very limited coverage for skilled nursing care after hospitalization, rehabilitative services, home health care, and hospice care for the terminally ill. It does not pay for personal (custodial) care, such as help with eating, dressing, or moving around.
Medicare Part B
Commonly known as medical insurance. It helps pay your doctors' bills and certain other charges, such as surgical care, diagnostic tests and procedures, some hospital outpatient services, laboratory services, physical and occupational therapy, and durable medical equipment. It does not cover prescription drugs, dental care, physicals, or other services not related to treatment of illness or injury.
Medicare Part D
Commonly known as the new Medicare outpatient prescription drug plan. The new Medicare Part D optional benefit is designed to provide outpatient prescription drug benefits and will be offered by approved Prescription Drug Plans (PDPs). The PDP benefits will be administered by private companies, some of which may be insurance companies. If you choose to enroll in Medicare Part D, you will pay a monthly Medicare Part D fee. Medicare Part D will pay for your outpatient prescription drug expenses after you have met deductible and coinsurance amounts. Deductible and coinsurance amounts are those expenses you must pay out-of-pocket before Medicare Part D will pay any money for your outpatient prescription drugs.
Medicare Supplement
Insurance policies sold by private insurance companies to fill "gaps" in original Medicare plan coverage. Medigap policies only work with original Medicare.
Medigap
A term used to refer to Medicare supplement and Medicare select policies designed to fill the "gaps" in original Medicare plan benefits.
Network
A group of doctors, hospitals, pharmacies, and other health care experts that have entered into an agreement with a health plan to take care of its members.
Nonparticipating physician
A doctor or supplier who does not accept assignment on all Medicare claims. A doctor or supplier who does not have a network agreement with a managed care plan.
Open enrollment period (OEP)
An annual period during which Medicare beneficiaries can switch Medicare Advantage plans or leave Medicare Advantage altogether and go back to original Medicare. The OEP occurs January 1 through March 31 each year. Medicare Advantage plans are not required to open their plans for enrollment during an OEP. (Medicare Advantage)

A one-time only six-month period when you can buy any Medicare supplement policy you want that is sold in Wisconsin. It starts when you sign up for Medicare Part B and you are age 65 or older. You cannot be denied coverage or charged more due to present or past health problems during this time period. (Medicare Supplement)
Optional supplemental benefits
Additional benefits offered by Medicare coordinated care plans that you may choose and that may include additional premiums.
Organization determination
A decision by a Medicare Advantage organization regarding the amount of service provided or the price the plan will reimburse for the service.
Original Medicare Plan
A pay-per-service health plan that lets you go to any doctor, hospital, or other health care supplier who accepts Medicare and is accepting new Medicare patients. You must pay the deductible. Medicare pays its share of the Medicare-approved amount and you pay your share (coinsurance). In some cases you may be charged more than the Medicare-approved amount. The Original Medicare Plan has two parts: Part A (hospital insurance) and Part B (medical insurance).
Out-of-pocket costs
Expenses paid by you in addition to plan premiums, which may include any or all of the following:
  • Deductible: A fixed amount paid for covered services prior to the plan making payments. Deductibles are usually required to be paid annually. Expenses counted towards your Medicare deductible are the amounts that Medicare would pay for the service, not what you may have actually paid.
  • Copayment: A fixed dollar amount. For example, many health plans require that you pay a fixed amount for each drug prescription you receive.
  • Coinsurance: A fixed percentage of the total cost of services, paid each time you use the service.
Your health plan may have an annual cap on total out-of-pocket expenses. This information is included in your initial enrollment materials.
Outpatient Care
Medical or surgical care that does not include an overnight hospital stay.
Passport plan
A network of providers who are outside of your plan's geographic service area, usually in a different state, which can be used by you in non-emergency or urgent care situations. Some managed care plans have these networks available to individuals who travel to certain states. Check with your plan on the availability of this provision.
Plan determination
A decision by a Medicare Advantage plan regarding the amount of service it will provide you or the price the plan will reimburse the provider for the service.
Point-of-Service (POS)
A Medicare Managed Care Plan option that lets you use doctors and hospitals outside the plan for an additional cost.
Preexisting condition
A medical condition diagnosed or treated up to six months prior to the purchase of an insurance policy. Medicare supplement policies may impose up to a 180-day waiting period before coverage for that condition begins.
Premium
The periodic payment to Medicare, an insurance company, or a health care plan for health care coverage.
Prescription drug plan (PDP)
Medicare offers optional prescription drug plan coverage, also called Medicare Part D. There are two types of Medicare plans that offer prescription drug coverage: stand-alone PDPs, and Medicare Advantage prescription drug plans.
Primary care doctor
A doctor who is trained to give you basic care. Your primary care doctor is the doctor you see first for most health problems. He or she may talk with other doctors and health care providers about your care and refer you to them. In many Medicare Managed Care Plans, you must see your primary care doctor before you can see any other health care provider.
Primary payer
An insurance policy, plan, or program that pays first on a claim for medical care. This could be Medicare or other health insurance.
Private Fee-for-Service Plan (PFFS)
A type of Medicare Advantage plan in which 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 or less for Medicare-covered benefits. You may have extra benefits the Original Medicare Plan does not cover.
Quality
Quality of care is how well the health plan keeps its members healthy or treats them when they are sick. Good quality health care means doing the right thing at the right time, in the right way, for the right person and getting the best possible results.
Quality Improvement Organization
Groups of practicing doctors and other health care experts. They are paid by the federal government to check and improve the care given to Medicare patients. They must review your complaints about the quality of care given by: inpatient hospitals, hospital outpatient departments, hospital emergency rooms, skilled nursing facilities, home health agencies, Private-Fee-for-Service plans, and ambulatory surgical centers.
Referral
An approval from your primary care doctor and health plan for you to see a specialist or get certain services. In many Medicare managed care plans, you need to get a referral before you get care from anyone except your primary care doctor. If you do not get a referral first, the plan may not pay for your care.
Regional Home Health Intermediary
A private company that contracts with Medicare to pay home health and hospice bills and check on the quality of home health care.
Secondary payer
An insurance policy, plan, or program that pays second on a claim for medical care. This could be Medicare, Medicaid, or other health insurance depending on the situation.
Service area
The area where the plan accepts enrollees and, for managed care plans, where the plan has contracted providers that you are required to use. Most coordinated care plans operate in a limited geographic area known as a service area. It is usually stated as county or zip code of operation.
Skilled nursing facility care
A level of care that requires daily involvement of skilled nursing or rehabilitation staff and that, as a practical matter, cannot be provided on an outpatient basis. Examples of skilled nursing facility care include intravenous injections and physical therapy. Needing custodial care, such as help with bathing and dressing, cannot in itself, qualify you for Medicare coverage in a skilled nursing facility. However, if you qualify for skilled nursing or rehabilitation care, Medicare covers all of your care needs in the facility.
State Health Insurance Assistance Program (SHIP)
A state program that gets money from the federal government to give free health insurance counseling and assistance to people with Medicare.
Urgent care
Covered services when you are temporarily out of the area and that are medically necessary and immediately needed as a result of an unforeseen illness, accident, or injury, and when it is not reasonable to obtain services from a network provider.
Usual and customary charge
The fee most commonly charged by providers for a particular service, procedure, or treatment, for that specialty, in that geographic area.
Waiting period
The time between when you sign up with a Medicare supplement insurance company or Medicare health plan and when the coverage starts.