Medicare Glossary

Dual Special Needs Plan (D-SNP)

A type of Medicare Advantage Special Needs Plan designed specifically for people who qualify for both Medicare and Medicaid, often coordinating benefits and offering extra support services between the two programs.

Also known as: D-SNP

Health Maintenance Organization (HMO)

A type of Medicare Advantage plan where you generally must use doctors, hospitals, and other providers in the plan's network, except in emergencies. You typically need a referral to see a specialist.

Also known as: HMO

Medicare Advantage

An alternative to Original Medicare offered by private insurance companies approved by Medicare. These plans (also called Part C) must cover all services that Original Medicare covers but often include extra benefits like dental, vision, and hearing. Most plans include drug coverage.

Also known as: Part C, MA plan

Medicare Advantage Prescription Drug Plan (MA-PD)

A Medicare Advantage plan that bundles medical coverage (Part A and B) together with prescription drug coverage (Part D) into a single plan.

Also known as: MA-PD

Medicare Cost Plan

A type of Medicare health plan, less common than Medicare Advantage, in which members can use plan providers for lower cost-sharing or go outside the network and have services covered under Original Medicare instead.

Also known as: Cost Plan

Medicare Part C

The formal name for Medicare Advantage. A type of Medicare coverage offered by private insurers that combines Part A, Part B, and usually Part D coverage into one plan.

Also known as: Medicare Advantage

Preferred Provider Organization (PPO)

A type of Medicare Advantage plan that allows you to see any provider who accepts Medicare, but you pay less when you use the plan's preferred (in-network) providers. Unlike HMOs, PPOs generally do not require referrals for specialists.

Also known as: PPO

Prior Authorization

Approval that your Medicare Advantage or Part D plan may require before you receive certain services or medications. Without prior authorization, the plan may not cover the cost. Original Medicare rarely requires prior authorization.

Also known as: Preauthorization, Pre-approval

Quality Bonus Payment

Extra payments that Medicare makes to Medicare Advantage plans that receive 4 or 5 stars in CMS's Star Ratings system. Plans that earn bonus payments can use the funds to offer richer benefits or lower premiums.

Service Area

The geographic area where a Medicare Advantage or Part D plan is available and provides coverage. Plans may have different networks and costs in different parts of their service area. Moving outside a plan's service area may trigger a Special Enrollment Period.

Special Needs Plan (SNP)

A Medicare Advantage plan designed for people with specific diseases, conditions, or characteristics — such as dual eligibles (Medicare and Medicaid), institutionalized beneficiaries, or those with certain chronic conditions like diabetes or heart disease.

Also known as: SNP

Star Ratings

A 1–5 star quality rating system that CMS uses to measure how well Medicare Advantage and Part D plans perform. Ratings are based on measures including member experience, customer service, and managing chronic conditions. Higher-rated plans may receive bonus payments.

Also known as: CMS Star Ratings, Quality ratings

Supplemental Benefits

Extra benefits offered by Medicare Advantage plans beyond the standard Medicare coverage. Examples include dental, vision, hearing, fitness programs, over-the-counter allowances, and transportation to medical appointments.

Also known as: Extra benefits

Utilization Management

Processes used by Medicare Advantage and Part D plans to ensure services and drugs are medically appropriate and used efficiently. Includes prior authorization, step therapy, and quantity limits.

Also known as: UM, Utilization review