Medicare

A Simple Glossary of Medicare Common Acronyms and Words

Medicare has a language of its own with special terms and acronyms. This is a short Glossary of the most basic special meanings. If it's a full glossary that you're looking for, we have links to four of our favorites at the end of this article.

 
 

Some of the most basic Medicare insurance terms,
in plain, everyday text.

Annual Deductible

If you have car insurance, you should be familiar with how a deductible works.

This is the amount that comes out of your pocket for either health care or prescriptions BEFORE your insurance kicks in. Think of it as a "delayed start" by your insurance company. Each year, you must pay for doctors, clinics, prescriptions, and other health care on your own until you spend as much as the annual deductible. (We have seen policies with deductibles in the $350 range, but it could be much higher or lower, or even zero.) After you've paid for services equal to your deductible, any future expenses fall under the terms of your insurance.

It's a general rule that the higher the deductible, the lower the premium for insurance. You probably will find you can choose between multiple policies with different deductibles. Don't forget: it starts all over with each New Year. Get more info at: What Is A Deductible in Medicare Insurance?

Annual Enrollment Period

Actually, it's the Open Annual Enrollment Period, which is the period between October 15 and December 7. The rules say that for most people, this is the only time you can sign-up for Part D Prescription Drug insurance plans. It also applies to people who already have coverage, but want to switch to a new company or policy.

There are exceptions. See: Joining, switching and leaving a Medicare Part D plan. You can switch to a 5-Star Part D plan at any time between December 8 and November 30 for the 2015 year. What is a 5-Star Part D Plan?

Copayment (sometimes "Co-pays, or Drug Co-Pay")

Many Medicare insurance policies require you to pay a set portion of the costs when you see a doctor or get a prescription. It's usually a set amount, like $10 or $20 dollars, instead of a percentage.

Estimated Annual Cost (and Estimated Annual Drug Cost)

These are terms you'll see as the heading for a column when you use the "find a plan" tool at medicare.gov. The Estimated Annual Cost is Medicare's estimate of the amount you will spend each year for health coverage. It includes the plan coverage, plus costs for premiums, copayments, deductibles and coinsurance, and expenses that are not covered by your insurance.

The Estimated Annual Drug Cost is similar, except that it is used when you compare Medicare Part D prescription drug insurance plans. This is the amount Medicare estimates you will pay each year for your prescriptions, including the monthly premium, your deductible (if any), your co-payments, and the price of any drug that is not covered by your insurance. If you entered your prescriptions into the Medicare Plan Finder, then this estimate includes the cost of those drugs. If you chose "I don't take any drugs," than the Estimated amount is for insurance premiums only, since you would have no drugs to include in the list. If you entered "I don't want to add drugs now," when you used the Plan Finder, then the amount includes Medicare's average drug costs for people on Medicare of your age and health status.

Formulary

You might be surprised to learn that the prescription drugs which insurers agree to cover is different from company to company. In other words, if you regularly use a prescription for "something-drug", you will find Insurance Company A includes it in their coverage, but Insurance Company B does not. If it's not on the formulary list, it's probably not covered.

The list of drugs that each plan covers is called the Formulary. You can review it before buying a policy, and we think you should if you are taking any fairly expensive prescriptions. More at: The Medicare Formulary Explained in Plain Text

Star Rating

The "Plan Results" page for Part D plans at "find a plan" at medicare.gov use a star rating that shows how the plan performs. Ratings go from 1 star (poor quality) to 5 stars (excellent) More at: What is a 5-Star Part D Plan?

Tiers

Your insurance company classifies the drugs in their formulary by placing them into "tiers". What you pay each time you order that drug depends on what tier it is in. Usually tier 1 drugs are the cheapest, and many generic drugs are Tier 1 drugs. Tiers 2 and 3 are usually brand name drugs, and each tier higher means you'll pay more for that prescription. More at:An Introduction to a Part D Formulary

 
DibbernsWhy this website?

We are a family of senior adults, with all the health issues of the average older American. Medicare has been a factor in our lives, as it is for millions of people like us. This website exists to offer plain talk, simple introductions to the maze of details that make up the Medicare program.

We aren't experts- we'll leave that to the real experts-- for the more complicated rules and issues of Medicare. What you'll find here is a beginning point. A start in your Medicare journey.

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Medicare & You Where is this topic in 'Medicare & You 2015'?
 

Look for a section named "Definitions" that begins on page 141.

You should have received a copy of 'Medicare & You 2015' in the mail. If you don't have your copy, call 800-803-7174. Download a pdf version.
 

Our favorite full glossaries

  • Medicare Part D Glossary
    www.q1medicare.com/PartD-Medicare-PartD-GlossaryOfTerms-A.php

    source: Q1Medicare.com
    languages: English
    An extensive glossary of terms pertaining to Part D Prescription coverage. Spread across multiple pages (one for each beginning letter of the word). It's a little hard to just browse through casually, but if you know what term you are looking for, you'll likely find it here.
  • Glossary
    www.medicare.gov/find-a-plan/staticpages/glossary/planfinder-glossary.aspx

    source: Medicare.gov - The Official U.S. Government Site for Medicare
    languages: English
    The big government, final resource glossary for all things Part D Prescription coverage. Watch out, this site is so large and complex, it's easy to get lost in the deep layers.
  • Glossary
    www.cms.gov/apps/glossary/

    source: Centers for Medicare & Medicaid Services
    language: English
    The OTHER big government, final resource glossary on all things Medicare as well as Medicaid and private insurance . There are lots of legal and regulatory terms which probably are beyond the average person's interest level.
  • Glossary
    www.medicareinteractive.org/page2.php?
    topic=counselor&page=glossary


    source: Medicare Interactive (maintained by Medicare Rights Center)
    language: English
    Self-described as "words and acronyms that are used when discussing Medicare, or are important to give you a better understanding of how Medicare works." A friendly, everyday writing style makes their definitions easy to understand.
Medicare Terms and Definitions In the news...

Deciphering Medicare's jargon: What the terms mean

"Medicare terminology can be confusing. But with so many options while choosing your coverage, it's important to understand what each means. Here are some terms you should know...""

From The Detroit Free Press October 16, 2014