What do Medicare terms mean? A Medicare glossary

The terms, A to Z

• Annual Enrollment Period (AEP)
• Annual Notice of Change (ANOC)
• Assignment
• Base beneficiary premium
• Benefit period
• Catastrophic coverage
• Coinsurance
• Copayment (copay)
• Coverage gap
• Creditable coverage
• Deductible
• Dual eligible
• Durable medical equipment (DME)
• End-Stage Renal Disease (ESRD)
• Evidence of Coverage (EOC)
• Excess charge
• Explanation of Benefits (EOB)
• Extra Help
• Formulary
• General Enrollment Period
• Guaranteed issue rights
• Health Maintenance Organization (HMO)
• Hold harmless provision
• Hospice
• Initial Enrollment Period
• Inpatient
• IRMAA (income-related monthly adjustment amount)
• Late enrollment penalty
• Lifetime reserve days
• Limiting charge
• Maximum out-of-pocket limit
• Medicaid
• Medically necessary
• Medicare Advantage (Part C)
• Medicare Advantage Open Enrollment Period
• Medicare-approved amount
• Medicare Number
• Medicare Prescription Payment Plan
• Medicare Savings Program (MSP)
• Medicare Summary Notice (MSN)
• Medigap (Medicare Supplement Insurance)
• Medigap Open Enrollment Period
• Network
• Observation status
• Original Medicare
• Out-of-pocket cap (Part D)
• Part A (Hospital Insurance)
• Part B (Medical Insurance)
• Part C
• Part D (drug coverage)
• Preferred Provider Organization (PPO)
• Premium
• Premium-free Part A
• Preventive services
• Prior authorization
• Private Fee-for-Service (PFFS) plan
• Qualifying inpatient hospital stay
• Quantity limit
• Referral
• Service area
• Skilled nursing facility (SNF)
• Special Enrollment Period (SEP)
• Special Needs Plan (SNP)
• Star Ratings
• Step therapy
• Tier
• Trial right

Annual Enrollment Period (AEP)

The Annual Enrollment Period (AEP) and Open Enrollment are two names for the same yearly period, October 15 to December 7: Medicare.gov calls it Open Enrollment, and CMS's enrollment dates fact sheet calls it the Annual Enrollment Period. During this period, people with Medicare can join, drop or switch a Medicare Advantage Plan or Medicare drug plan, or move between Original Medicare and Medicare Advantage.

Changes made during this period take effect January 1 (the plan must get your request by December 7), and CMS's plan enrollment rules call it the Annual Coordinated Election Period.

See also: What are the Medicare enrollment periods? · Can I change my Medicare plan, and when?

Annual Notice of Change (ANOC)

The Annual Notice of Change is a notice that a Medicare Advantage Plan, Medicare drug plan or other Medicare plan sends its members each fall, listing changes in coverage, costs and more that take effect in January.

Medicare.gov says plans send the ANOC in September and that members should review the changes to decide whether the plan will still meet their needs next year.

See also: Can I change my Medicare plan, and when? · What happens if my Medicare Advantage plan is leaving for 2027?

Assignment

Assignment is an agreement by a doctor, provider or supplier to be paid directly by Medicare, to accept the Medicare-approved amount as full payment for a covered service, and not to bill you more than the Medicare deductible and coinsurance.

A provider who accepts assignment must submit the claim to Medicare and can't charge you for submitting it, and Medicare.gov says most doctors, providers and suppliers accept assignment.

See also: How much does Medicare cost in 2026?

Base beneficiary premium

The national base beneficiary premium is a yearly amount Medicare uses to calculate the Part D late enrollment penalty, and it is $38.99 in 2026.

The Part D penalty is 1% of the national base beneficiary premium times the number of full months you went without Part D or other creditable drug coverage, rounded to the nearest 10 cents, and because the base amount can change each year, the penalty can too.

See also: What are the Medicare late enrollment penalties, and how do I avoid them? · Does Medicare cover prescription drugs?

Benefit period

A benefit period is the way Original Medicare measures your use of hospital and skilled nursing facility care: it begins the day you're admitted as an inpatient in a hospital or skilled nursing facility and ends when you haven't had inpatient hospital care or skilled care in a skilled nursing facility for 60 days in a row.

You pay the Part A deductible ($1,736 in 2026) for each benefit period, and there's no limit to the number of benefit periods you can have.

See also: How much does Medicare cost in 2026? · Does Medicare cover rehab in a skilled nursing facility?

Catastrophic coverage

Catastrophic coverage is the last stage of Medicare drug coverage (Part D): once your out-of-pocket spending on covered Part D drugs reaches $2,100 in 2026 ($2,400 in 2027), you pay nothing for covered Part D drugs for the rest of the calendar year.

Certain payments made on your behalf, like through the Extra Help program, count toward reaching catastrophic coverage.

See also: Does Medicare cover prescription drugs?

Coinsurance

Coinsurance is your share of the cost of a covered service after you pay any deductible, usually stated as a percentage (for example, 20%).

In Original Medicare, you usually pay 20% of the Medicare-approved amount for each Part B-covered service or item after the Part B deductible.

See also: How much does Medicare cost in 2026?

Copayment (copay)

A copayment is a fixed amount you may pay as your share of the cost of a covered service or drug after you pay any deductible, rather than a percentage of the cost.

Medicare Advantage and Part D plans set their own copayments each year, and in Original Medicare you also pay the hospital a copayment for each service you get in a hospital outpatient setting, except certain preventive services.

See also: How much does Medicare cost in 2026?

Coverage gap

The coverage gap was a phase of the Medicare Part D drug benefit that the Inflation Reduction Act eliminated starting in 2025.

The standard Part D benefit now has three stages, the deductible, initial coverage and catastrophic coverage, with a yearly cap on out-of-pocket costs for covered drugs ($2,100 in 2026).

See also: Does Medicare cover prescription drugs?

Creditable coverage

Creditable prescription drug coverage is drug coverage that's expected to pay, on average, at least as much as Medicare drug coverage (Part D), such as coverage from a current or former employer or union, TRICARE, the VA or the Indian Health Service.

If you go 63 days or more in a row without Part D or other creditable drug coverage after your Initial Enrollment Period, you may owe the Part D late enrollment penalty, and your current plan must tell you each year whether its drug coverage is creditable.

See also: What are the Medicare late enrollment penalties, and how do I avoid them? · Do I need to sign up for Medicare at 65 if I'm still working?

Deductible

A deductible is the amount you must pay for health care or prescriptions before Original Medicare, your Medicare Advantage Plan, your Medicare drug plan or your other insurance begins to pay.

In 2026, the Part B deductible is $283 a year, the Part A deductible is $1,736 for each benefit period, and no Medicare drug plan may have a deductible above $615.

See also: How much does Medicare cost in 2026?

Dual eligible

A dual eligible is a person who has both Medicare and full-benefit Medicaid coverage, which Medicare.gov describes as being dually eligible.

Medicare pays first for Medicare-covered services and Medicaid pays last, and dual eligibles automatically get Extra Help and are enrolled in a Medicare drug plan that covers their prescriptions.

See also: What is the difference between Medicare and Medicaid? · What is a Medicare Special Needs Plan (SNP)?

Durable medical equipment (DME)

Durable medical equipment is equipment, like a walker, wheelchair or hospital bed, that your doctor orders for use in your home for a medical reason, that can withstand repeated use, is expected to last at least 3 years and is typically useful only to someone who is sick or injured.

Medicare Part B covers medically necessary DME, and you pay 20% of the Medicare-approved amount after the Part B deductible.

See also: Does Medicare cover durable medical equipment? · Does Medicare cover wheelchairs and scooters?

End-Stage Renal Disease (ESRD)

End-Stage Renal Disease is permanent kidney failure that requires a regular course of dialysis or a kidney transplant.

People with ESRD may be able to get Medicare before age 65.

See also: How does Medicare work if I have kidney failure (ESRD)? · Does Medicare cover dialysis? · Who is eligible for Medicare?

Evidence of Coverage (EOC)

The Evidence of Coverage is a document that a Medicare Advantage Plan, Medicare drug plan or other Medicare plan sends its members each year, usually in the fall, with details about what the plan covers, how much you pay and more.

Medicare.gov advises contacting your plan if you don't get your Evidence of Coverage.

See also: How do I choose a Medicare plan? · What is the difference between Original Medicare and Medicare Advantage?

Excess charge

In Original Medicare, an excess charge is the difference between the Medicare-approved amount and the higher amount a doctor or other health care provider is legally permitted to charge.

Only providers who don't accept assignment can charge more than the Medicare-approved amount, and among the standardized Medigap plans, Plans F and G cover Part B excess charges.

See also: What is the difference between Medigap Plan G and Plan N? · What is the difference between Medigap Plan F and Plan G?

Explanation of Benefits (EOB)

An Explanation of Benefits is a notice you get from your Medicare drug plan the month after the pharmacy bills the plan, summarizing the prescriptions you filled, what your plan paid, what you and others paid, and your coverage stage.

Medicare.gov advises checking each Explanation of Benefits for mistakes and contacting your plan if you have questions, find mistakes or suspect fraud.

See also: Does Medicare cover prescription drugs? · Does Medicare ever call you, and how do you spot a Medicare scam?

Extra Help

Extra Help is a Medicare program that helps people with limited income and resources pay Medicare drug coverage (Part D) premiums, deductibles, coinsurance and other costs.

People with full-benefit Medicaid, Supplemental Security Income or help from their state paying Part B premiums through a Medicare Savings Program get Extra Help automatically, others can apply, and people with Extra Help don't pay a Part D late enrollment penalty.

See also: How can I get help paying for Medicare? · Does Medicare cover prescription drugs?

Formulary

A formulary is a Medicare drug plan's list of covered drugs, which can include brand-name drugs, generic drugs, original biological products and biosimilars.

Each formulary includes at least 2 drugs in the most commonly prescribed categories and classes, plans choose which drugs they offer, and a plan can change its formulary during the year under guidelines Medicare sets.

See also: Does Medicare cover prescription drugs?

General Enrollment Period

The General Enrollment Period is January 1 to March 31 each year, when people who missed their Initial Enrollment Period can sign up for Part B (and premium Part A), with coverage starting the month after they sign up.

You might pay a monthly late enrollment penalty if you sign up during the General Enrollment Period and don't qualify for a Special Enrollment Period.

See also: What are the Medicare enrollment periods? · What are the Medicare late enrollment penalties, and how do I avoid them? · When should I sign up for Medicare?

Guaranteed issue rights

Guaranteed issue rights are limited situations in which an insurance company must sell you certain Medigap policies, must cover your pre-existing health conditions and can't charge you more because of past or present health problems.

Most guaranteed issue rights arise when your other health coverage changes, like when a Medicare Advantage Plan leaves Medicare or employer coverage that pays after Medicare ends, and you generally must apply no more than 63 days after that coverage ends.

See also: Can I switch from Medicare Advantage to Original Medicare with a Medigap plan? · What happens if my Medicare Advantage plan is leaving for 2027?

Health Maintenance Organization (HMO)

A Health Maintenance Organization (HMO) is a type of Medicare Advantage Plan in which you generally must get care from the doctors, other health care providers and hospitals in the plan's network, except for emergency care, out-of-area urgent care and temporary out-of-area dialysis.

In most HMOs you need to choose a primary care doctor and get a referral to see a specialist, and some HMO Point-of-Service (HMOPOS) plans cover certain out-of-network services for a higher copayment or coinsurance.

See also: What is the difference between a Medicare Advantage HMO and a PPO? · What is the difference between Original Medicare and Medicare Advantage?

Hold harmless provision

The hold harmless provision is a rule in federal law that, for people who get Social Security retirement, survivors or disability benefits and have their Part B premium deducted from those payments, reduces a Part B premium increase if necessary so their net monthly Social Security payment doesn't go down.

The hold harmless provision doesn't apply to people who must pay an income-related monthly adjustment amount (IRMAA).

See also: What is the Medicare Part B premium for 2027? · Do I need to sign up for Social Security to get Medicare?

Hospice

Hospice is end-of-life care for people with illnesses that can't be cured, using a team approach that addresses the patient's medical, physical, social, emotional and spiritual needs and also supports the family or caregiver.

Medicare Part A covers hospice when your hospice doctor and your regular doctor (if you have one) certify that you're terminally ill with a life expectancy of 6 months or less, you accept comfort care instead of care to cure the illness, and you sign a statement choosing hospice care instead of other Medicare-covered treatments for the illness.

See also: Does Medicare cover hospice care?

Initial Enrollment Period

The Initial Enrollment Period is generally your first chance to sign up for Part A and Part B: 7 months that start 3 months before you turn 65 and end 3 months after the month you turn 65.

If you miss your Initial Enrollment Period, you may have to wait to sign up and pay a monthly late enrollment penalty for as long as you have Part B, unless you qualify for a Special Enrollment Period.

See also: When should I sign up for Medicare? · What are the Medicare enrollment periods? · How do I sign up for Medicare?

Inpatient

Inpatient status in a hospital begins when you're formally admitted with a doctor's order, and the day before you're discharged is your last inpatient day.

Whether you're an inpatient or an outpatient affects what you pay and whether Medicare covers skilled nursing facility care afterward, and an inpatient admission is generally appropriate when you're expected to need 2 or more midnights of medically necessary hospital care.

See also: Does Medicare cover observation stays in the hospital? · Does Medicare cover rehab in a skilled nursing facility?

IRMAA (income-related monthly adjustment amount)

IRMAA (the income-related monthly adjustment amount) is an extra amount people with higher incomes pay on top of their Part B premium and their Part D plan premium, based on the modified adjusted gross income on their IRS tax return from 2 years ago.

In 2026, IRMAA applies if your 2024 income was above $109,000 on an individual tax return or $218,000 on a joint return, and Social Security tells you if you have to pay it.

See also: What is IRMAA, and how does income affect Medicare premiums? · What is the Medicare Part B premium for 2027?

Late enrollment penalty

A late enrollment penalty is an extra amount added to your monthly Medicare premium if you don't sign up for Part A (when you have to buy it), Part B or Part D when you're first eligible and don't have other coverage similar in value to Medicare.

The Part B penalty is 10% for each full 12-month period you could have had Part B, the Part D penalty is 1% of the national base beneficiary premium for each month without creditable drug coverage, and both are usually charged for as long as you have that coverage.

See also: What are the Medicare late enrollment penalties, and how do I avoid them? · When should I sign up for Medicare?

Lifetime reserve days

Lifetime reserve days are 60 extra days of inpatient hospital coverage that Original Medicare pays for when you're in a hospital for more than 90 days, and they can be used only once during your lifetime.

For each lifetime reserve day, Medicare pays all covered costs except a daily coinsurance, which is $868 a day in 2026.

See also: How much does Medicare cost in 2026?

Limiting charge

The limiting charge is the most a non-participating provider (one who doesn't accept assignment) can charge you for certain Medicare-covered services: in many cases, no more than 15% above the Medicare-approved amount.

The limiting charge doesn't apply to some supplies and durable medical equipment, so your costs for those could be higher.

See also: How much does Medicare cost in 2026? · What is the difference between Medigap Plan G and Plan N?

Maximum out-of-pocket limit

The maximum out-of-pocket limit is the yearly limit on what you pay for covered health services in a Medicare Advantage Plan, and once you reach the plan's limit, the plan pays 100% of covered health services for the rest of the calendar year.

The limit varies by plan and may differ for in-network and out-of-network services, while Original Medicare has no yearly out-of-pocket limit unless you have supplemental coverage like Medigap.

See also: What is the difference between Original Medicare and Medicare Advantage? · How much does Medicare cost in 2026?

Medicaid

Medicaid is a joint federal and state program that helps with medical costs for some people with limited income and resources, and its rules vary from state to state.

Medicaid offers some benefits Medicare doesn't normally cover, like nursing home care and personal care services, and people who qualify can have both Medicare and Medicaid.

See also: What is the difference between Medicare and Medicaid? · How can I get help paying for Medicare?

Medically necessary

Medically necessary describes health care services or supplies that are needed to diagnose or treat an illness, injury, condition, disease or its symptoms and that meet accepted standards of medicine.

Original Medicare covers most medically necessary services and supplies, and Medicare Advantage Plans must cover almost all medically necessary services Original Medicare covers.

See also: What doesn't Medicare cover?

Medicare Advantage (Part C)

A Medicare Advantage Plan (Part C) is a Medicare-approved health plan from a private company that bundles your Part A, Part B and usually Part D coverage into one plan, as an alternative to Original Medicare.

Medicare Advantage Plans must cover all emergency and urgent care and almost all medically necessary services Original Medicare covers, may offer extra benefits like vision, hearing and dental, and set their own networks, rules and costs, which vary by plan.

See also: What is the difference between Original Medicare and Medicare Advantage? · How do I choose a Medicare plan? · What are the parts of Medicare (A, B, C and D)?

Medicare Advantage Open Enrollment Period

The Medicare Advantage Open Enrollment Period, January 1 to March 31 each year (and within the first 3 months you have Medicare), lets people already in a Medicare Advantage Plan switch to another Medicare Advantage Plan or drop their plan and return to Original Medicare.

If you return to Original Medicare during the Medicare Advantage Open Enrollment Period, you can also join a separate Medicare drug plan, and coverage starts the first of the month after the plan gets your request.

See also: Can I change my Medicare plan, and when? · What are the Medicare enrollment periods?

Medicare-approved amount

The Medicare-approved amount is the payment amount Original Medicare sets for a covered service or item, and when your provider accepts assignment, Medicare pays its share and you pay your share of that amount.

For most Part B services, your share is 20% of the Medicare-approved amount after the Part B deductible.

See also: How much does Medicare cost in 2026?

Medicare Number

Your Medicare Number is the number on your red, white and blue Medicare card that's unique to you, and it isn't your Social Security Number.

You need your Medicare Number to join a Medicare health or drug plan, Medicare Numbers don't use the letters B, I, L, O, S and Z, and Medicare.gov says to give it only to your health care providers, insurance companies or health plans, or people you trust who work with Medicare.

See also: How do I replace my Medicare card? · Does Medicare ever call you, and how do you spot a Medicare scam?

Medicare Prescription Payment Plan

The Medicare Prescription Payment Plan is a voluntary payment option, offered by all Medicare drug plans and Medicare health plans with drug coverage, that spreads your out-of-pocket costs for covered drugs across the calendar year in monthly bills from your plan instead of paying at the pharmacy.

There's no cost to participate in the Medicare Prescription Payment Plan, but the payment option doesn't save you money or lower your drug costs.

See also: Does Medicare cover prescription drugs? · How can I get help paying for Medicare?

Medicare Savings Program (MSP)

A Medicare Savings Program is a state-run program that helps people with limited income and resources pay some or all of their Medicare premiums, and in some cases their deductibles, coinsurance and copayments.

There are 4 Medicare Savings Programs, including the Qualified Medicare Beneficiary (QMB) Program, you apply through your state, and people whose state pays their Part B premium through a Medicare Savings Program automatically get Extra Help.

See also: How can I get help paying for Medicare? · What is the difference between Medicare and Medicaid?

Medicare Summary Notice (MSN)

A Medicare Summary Notice is a notice, not a bill, that people with Original Medicare get every 6 months when they've had Part A or Part B services or supplies, showing what providers billed to Medicare, what Medicare paid and the maximum amount you may owe the provider.

The last page of a Medicare Summary Notice explains how to file an appeal if you disagree with a decision, and you can choose to get MSNs electronically.

See also: How do I appeal a Medicare denial? · Does Medicare ever call you, and how do you spot a Medicare scam?

Medigap (Medicare Supplement Insurance)

Medigap (Medicare Supplement Insurance) is extra insurance you can buy from a private insurance company to help pay your share of costs in Original Medicare, like copayments, coinsurance and deductibles.

Medigap policies are standardized and in most states named by letters, like Plan G or Plan K, with the same benefits whichever company sells them, and Medigap works only with Original Medicare, not with Medicare Advantage.

See also: What is the difference between Medigap Plan G and Plan N? · Can I switch from Medicare Advantage to Original Medicare with a Medigap plan?

Medigap Open Enrollment Period

The Medigap Open Enrollment Period is a one-time, 6-month period that starts the first month you have Part B and are 65 or older, when you can buy any Medigap policy sold in your state and the insurance company can't deny you coverage because of pre-existing health problems.

After the Medigap Open Enrollment Period ends, you may not be able to buy a Medigap policy, or it may cost more, unless you have a guaranteed issue right.

See also: What is the difference between Medigap Plan G and Plan N? · When should I sign up for Medicare?

Network

A plan's network is the facilities, providers and suppliers that have a contract with the plan to provide services.

In an HMO you generally must get non-emergency care in the network, while a PPO also covers out-of-network care, usually at a higher cost.

See also: What is the difference between a Medicare Advantage HMO and a PPO? · What is the difference between Original Medicare and Medicare Advantage?

Observation status

Observation status means you're getting observation services, which are hospital outpatient services you get while your doctor decides whether to admit you as an inpatient or discharge you, so you're an outpatient even if you spend the night in the hospital.

Time under observation doesn't count toward the 3-day inpatient stay Medicare requires before it covers skilled nursing facility care, and the hospital must give you a Medicare Outpatient Observation Notice (MOON) if you get observation services for more than 24 hours.

See also: Does Medicare cover observation stays in the hospital? · Does Medicare cover rehab in a skilled nursing facility?

Original Medicare

Original Medicare is a fee-for-service health insurance program with 2 parts, Part A (Hospital Insurance) and Part B (Medical Insurance), in which you typically pay a portion of the costs for covered services as you get them.

With Original Medicare you can go to any doctor or hospital that takes Medicare anywhere in the U.S., and you can add a separate Medicare drug plan and a Medigap policy.

See also: What is the difference between Original Medicare and Medicare Advantage? · What are the parts of Medicare (A, B, C and D)?

Out-of-pocket cap (Part D)

The Part D out-of-pocket cap is the yearly limit on what you pay for covered Medicare Part D drugs, $2,100 in 2026 and $2,400 in 2027, after which you pay nothing for covered Part D drugs for the rest of the calendar year.

The cap applies to everyone with Medicare drug coverage, and your deductible and certain payments made on your behalf, like through Extra Help, count toward it.

See also: Does Medicare cover prescription drugs?

Part A (Hospital Insurance)

Medicare Part A (Hospital Insurance) helps cover inpatient care in hospitals, skilled nursing facility care, hospice care and some home health care.

Most people pay no Part A premium because they or a spouse paid Medicare taxes long enough while working, and the Part A deductible is $1,736 for each benefit period in 2026.

See also: What are the parts of Medicare (A, B, C and D)? · How much does Medicare cost in 2026?

Part B (Medical Insurance)

Medicare Part B (Medical Insurance) helps cover services from doctors and other health care providers, outpatient care, home health care, durable medical equipment and many preventive services.

In 2026, the standard Part B premium is $202.90 a month (or higher depending on income) and the deductible is $283 a year, after which you usually pay 20% of the Medicare-approved amount.

See also: What are the parts of Medicare (A, B, C and D)? · What is the Medicare Part B premium for 2027?

Part C

Part C is another name for Medicare Advantage: Medicare-approved health plans from private companies that bundle your Part A, Part B and usually Part D coverage as an alternative to Original Medicare.

You need both Part A and Part B to join a Part C plan, and you must keep paying your Part B premium to stay in it.

See also: What is the difference between Original Medicare and Medicare Advantage? · What are the parts of Medicare (A, B, C and D)?

Part D (drug coverage)

Medicare Part D is optional prescription drug coverage from Medicare-approved private plans, which you get through a separate Medicare drug plan added to Original Medicare or as part of a Medicare Advantage Plan.

If you don't join when you first get Medicare and go 63 days or more without creditable drug coverage, you may pay a Part D late enrollment penalty.

See also: Does Medicare cover prescription drugs? · What are the Medicare late enrollment penalties, and how do I avoid them?

Preferred Provider Organization (PPO)

A Preferred Provider Organization (PPO) is a type of Medicare Advantage Plan with a network of doctors, other health care providers and hospitals, in which you pay less in the network and can generally go out of network for covered services, usually for more.

In a PPO you don't need to choose a primary care doctor or get a referral to see a specialist, and you're always covered for emergency and urgent care.

See also: What is the difference between a Medicare Advantage HMO and a PPO?

Premium

A premium is a monthly amount you pay for health or drug coverage, whether you get services or not.

People with Medicare may pay premiums for Part B, a Medicare drug plan, a Medicare Advantage Plan or a Medigap policy, while most people pay no premium for Part A.

See also: How much does Medicare cost in 2026? · What is the Medicare Part B premium for 2027?

Premium-free Part A

Premium-free Part A means you don't pay a monthly premium for Part A, generally because you or another qualifying person, like a spouse, paid Medicare taxes long enough while working (generally at least 10 years).

People who don't qualify may be able to buy Part A for $311 or $565 a month in 2026, depending on how long they or their spouse worked and paid Medicare taxes.

See also: How much does Medicare cost in 2026? · Who is eligible for Medicare?

Preventive services

Preventive services are health care that helps you stay healthy, find health problems early, determine the most effective treatments and prevent certain diseases, including exams, vaccines, lab tests, screenings, health monitoring, and counseling and education.

Medicare Part B covers many preventive services, and you pay nothing for most of them if you get them from a provider who accepts assignment.

See also: Does Medicare cover an annual physical? · Does Medicare cover colonoscopies? · Does Medicare cover flu shots?

Prior authorization

Prior authorization is approval that you or your doctor must get from a Medicare Advantage Plan or Medicare drug plan before the plan will cover certain services, supplies or drugs.

In most cases Original Medicare doesn't require prior authorization, and when a Medicare Advantage Plan approves a treatment, the approval must stay valid for as long as the treatment is medically necessary.

See also: Do Medicare Advantage plans require prior authorization? · What is the difference between Original Medicare and Medicare Advantage?

Private Fee-for-Service (PFFS) plan

A Private Fee-for-Service (PFFS) plan is a type of Medicare Advantage Plan in which the plan decides how much it pays doctors, other health care providers and hospitals, and how much you pay when you get care.

You can use any Medicare-approved provider who accepts the plan's payment terms and agrees to treat you, and a provider can decide at every visit whether to accept the plan's terms.

See also: What is the difference between a Medicare Advantage HMO and a PPO? · What is the difference between Original Medicare and Medicare Advantage?

Qualifying inpatient hospital stay

A qualifying inpatient hospital stay is a medically necessary inpatient hospital stay of at least 3 days in a row, counting the day you're admitted but not the day you leave, that Original Medicare requires before it covers skilled nursing facility care.

Time spent in the hospital under observation or in the emergency room before you're admitted doesn't count toward the 3 days, even if you're there overnight.

See also: Does Medicare cover rehab in a skilled nursing facility? · Does Medicare cover observation stays in the hospital?

Quantity limit

A quantity limit is a Medicare drug plan rule that limits how much of a drug the plan covers over a certain time period, for safety and cost reasons, like covering only 30 tablets of a drug a month.

You or your prescriber can ask the plan for an exception if a quantity limit isn't medically appropriate for you.

See also: Does Medicare cover prescription drugs?

Referral

A referral is a written order from your primary care doctor for you to see a specialist or get certain medical services, and without one a plan may not pay for a specialist's services.

In most cases Original Medicare doesn't require a referral to see a specialist, while most Medicare Advantage HMOs do.

See also: What is the difference between a Medicare Advantage HMO and a PPO? · What is the difference between Original Medicare and Medicare Advantage?

Service area

A service area is the area where you must live for a Medicare health or drug plan to accept you as a member, and for plans that limit which doctors and hospitals you use, it's also generally the area where you get routine (non-emergency) care.

Plans can, and in some cases must, disenroll you if you move outside their service area, and moving out of it gives you a Special Enrollment Period to change plans.

See also: Can I change my Medicare plan, and when? · What are the Medicare enrollment periods?

Skilled nursing facility (SNF)

A skilled nursing facility is a nursing facility with the staff and equipment to give skilled nursing care and, in most cases, skilled rehabilitative services and other related health services.

Medicare Part A covers short-term care in a skilled nursing facility after a qualifying inpatient hospital stay, up to 100 days in each benefit period, and in 2026 you pay $0 a day for days 1-20 after the Part A deductible and $217 a day for days 21-100.

See also: Does Medicare cover rehab in a skilled nursing facility? · Does Medicare pay for nursing home or long-term care?

Special Enrollment Period (SEP)

A Special Enrollment Period is a time outside the usual enrollment periods when you can sign up for Part A and Part B, or join, switch or drop a Medicare Advantage Plan or Medicare drug plan, because of certain situations like losing job-based coverage, moving or getting Medicaid.

For example, if you or your spouse are still working and have job-based health coverage, you can sign up for Part B up to 8 months after the job or the coverage ends, whichever happens first, generally without a late enrollment penalty.

See also: What are the Medicare enrollment periods? · Do I need to sign up for Medicare at 65 if I'm still working? · Can I change my Medicare plan, and when?

Special Needs Plan (SNP)

A Special Needs Plan is a type of Medicare Advantage Plan for people with specific severe and chronic diseases, certain health care needs, or who also have Medicaid, and it tailors its benefits, provider choices and drug lists to the group it serves.

The 3 types are Dual Eligible SNPs (D-SNPs), Chronic Condition SNPs (C-SNPs) and Institutional SNPs (I-SNPs); all SNPs must include Part D drug coverage, and you can stay enrolled only while you meet the plan's conditions.

See also: What is a Medicare Special Needs Plan (SNP)? · What is the difference between Medicare and Medicaid?

Star Ratings

Star Ratings are Medicare's overall quality and performance ratings for plans, from 1 to 5 stars, based on information from member satisfaction surveys, plans and health care providers, with a 5-star rating considered excellent.

Medicare updates the ratings each fall for the following year, and a 5-star Special Enrollment Period lets you switch to a plan with a 5-star rating once between December 8 and November 30 of the following year.

See also: How do I choose a Medicare plan? · Can I change my Medicare plan, and when?

Step therapy

Step therapy is a type of prior authorization in which a Medicare drug plan requires you to first try a certain less expensive drug that's been proven effective for most people with your condition before it covers a more expensive drug.

You or your prescriber can ask the plan for an exception to step therapy, with a statement from your prescriber explaining the medical reason.

See also: Does Medicare cover prescription drugs? · Do Medicare Advantage plans require prior authorization?

Tier

A tier is a cost level on a Medicare drug plan's drug list (formulary), and generally a drug in a lower tier costs you less than a drug in a higher tier.

Each plan divides its tiers in its own way, for example most generic drugs in tier 1 and very high-cost drugs in a specialty tier, and you or your prescriber can ask for a tiering exception to pay less for a drug in a higher tier.

See also: Does Medicare cover prescription drugs?

Trial right

A trial right is a Medigap guaranteed issue right that lets you try a Medicare Advantage Plan and still buy a Medigap policy if you change your mind and return to Original Medicare within the first year.

A trial right applies if you joined a Medicare Advantage Plan (or PACE) when you were first eligible for Medicare, or if you dropped a Medigap policy to join a Medicare Advantage Plan for the first time, in which case you can get your old policy back if the same company still sells it.

See also: Can I switch from Medicare Advantage to Original Medicare with a Medigap plan? · Can I change my Medicare plan, and when?

How to use this glossary

The terms are listed A to Z, and the jump list at the start of the glossary links to each one. Each definition ends with links to answers that explain the topic in more depth, like the parts of Medicare, the Medicare enrollment periods and what Medicare costs.

Dollar amounts are the 2026 figures that CMS and Medicare.gov publish, with 2027 figures where Medicare has announced them. The definitions describe how Medicare works at the program level: Medicare Advantage and Part D plans set their own costs and rules each year within Medicare's rules, so a plan's Evidence of Coverage and Annual Notice of Change describe that plan.

Where the definitions come from

Each definition restates what Medicare.gov topic pages and pop-up definitions, CMS fact sheets and guidance, and federal notices say about the term, checked on the review date shown on this page. For questions about your own coverage, visit Medicare.gov or call 1-800-MEDICARE (1-800-633-4227); TTY users can call 1-877-486-2048.