Glossary
Annual Enrollment Period (AEP)
A yearly window when people can review and change Medicare Advantage and Part D plans.
Benefit period
A way Medicare Part A tracks inpatient and certain facility costs; it starts when you’re admitted and ends after you’ve been out of inpatient/SNF care for a period of time.
Coinsurance
A percentage you pay for covered services after your deductible (example: 20%).
Copayment (Copay)
A fixed dollar amount you pay for a service (example: $30 per visit).
Deductible
The amount you pay out of pocket before your plan starts paying for certain services.
Drug tier
A cost level for a medication in a Part D plan; lower tiers usually cost less than higher tiers.
Durable Medical Equipment (DME)
Medical equipment meant for repeated use, like walkers, wheelchairs, hospital beds, and oxygen equipment.
Facility fee
A charge for the use of a hospital outpatient department or facility, separate from the professional fee.
Formulary
A plan’s list of covered prescription drugs, usually with tiers and coverage rules.
Home health
Skilled care at home (like nursing or therapy) when eligibility criteria are met; not long-term custodial help.
Homebound
A status often required for Medicare-covered home health—meaning it’s difficult to leave home without help.
Inpatient
You’re formally admitted to a hospital (typically billed under Part A).
Inpatient Rehabilitation Facility (IRF)
A rehab hospital or unit providing intensive rehab with medical supervision.
Medical necessity
A service that’s needed to diagnose or treat a condition and meets Medicare’s coverage rules.
Medicare Advantage (Part C)
A private Medicare plan that must cover what Original Medicare covers, but usually adds networks, prior authorization, and plan-specific costs.
Medicare Part A
Part A helps pay for inpatient hospital care, and it can also help with certain post-hospital facility care.
Medicare Part B
Part B generally covers doctor visits, outpatient care, many tests, preventive services, and some medical equipment.
Medicare Part D
Prescription drug coverage offered by private plans, with formularies, tiers, and rules.
Medigap (Medicare Supplement)
Private insurance that helps pay some costs Original Medicare doesn’t pay, like deductibles and coinsurance (varies by plan).
Network
The doctors, hospitals, and facilities a plan contracts with (especially Medicare Advantage).
Observation status
Hospital care billed as outpatient, even if you stay overnight (often billed under Part B).
Out-of-pocket maximum (MOOP)
The most you pay in a year for covered Part A and Part B services in a Medicare Advantage plan.
Premium
A monthly amount you pay to have coverage (like Part B or a Medicare plan).
Prior authorization
Plan approval required before a service is covered (common for imaging, procedures, rehab, DME).
Quantity limit
A rule limiting how much of a medication the plan covers in a set time period.
Referral
A request from your primary doctor to see a specialist or get certain services, required by some plans.
Screening vs diagnostic
Screening is preventive testing in people without symptoms; diagnostic testing checks a problem or abnormal finding.
Skilled Nursing Facility (SNF)
A facility that provides short-term skilled nursing and rehab services after a qualifying hospital stay (rules vary).
Special Enrollment Period (SEP)
A time outside the normal enrollment windows when you can make certain Medicare plan changes because of a qualifying event.
Step therapy
A rule requiring you to try a lower-cost or preferred drug before the plan covers another drug.