Medicare Glossary

Medicaid

A joint federal and state program that helps with medical costs for people with limited income and resources. Some people qualify for both Medicare and Medicaid (called "dual eligibles") and may receive extra help with costs.

Medically Necessary

Services or supplies that are needed to diagnose or treat a medical condition and meet accepted standards of medical practice. Medicare only pays for services it considers medically necessary.

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 Beneficiary Identifier (MBI)

The unique number printed on your red, white, and blue Medicare card, used to identify you for Medicare claims and services. It replaced Social Security numbers on Medicare cards to help protect against identity theft.

Also known as: MBI, Medicare Number

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 A

Hospital insurance. Covers inpatient hospital stays, skilled nursing facility care, hospice care, and some home health care. Most people don't pay a monthly premium for Part A if they or their spouse worked and paid Medicare taxes for at least 10 years.

Also known as: Hospital Insurance

Medicare Part B

Medical insurance. Covers most doctor services, outpatient care, preventive services, home health care, and durable medical equipment. You pay a monthly premium for Part B (adjusted based on income for higher earners).

Also known as: Medical Insurance

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

Medicare Part D

Medicare prescription drug coverage. A voluntary program offered through private insurers to help pay for outpatient prescription drugs. Plans vary in which drugs they cover (formulary) and what you pay. You may owe a late enrollment penalty if you don't join when first eligible.

Also known as: Prescription drug coverage

Medicare Savings Program

State programs that help people with limited income pay Medicare premiums, deductibles, copays, and coinsurance. The four types are QMB, SLMB, QI, and QDWI, each with different income and eligibility thresholds.

Also known as: MSP

Medicare SELECT

A type of Medigap policy that requires you to use specific hospitals and, in some cases, specific doctors (except in emergencies) to get full benefits. In exchange, premiums are typically lower than standard Medigap plans.

Medicare Summary Notice (MSN)

A notice you get every 3 months showing all the services or supplies that providers billed to Medicare during that period, what Medicare approved and paid, and what you may owe. It is not a bill but helps you track your Medicare spending.

Also known as: MSN

Medicare-Approved Amount

The fee Medicare sets for a medical service or item. Doctors who accept Medicare assignment agree to accept this amount as full payment. You pay your share (copay or coinsurance) based on this approved amount, not the doctor's billed charge.

Also known as: Medicare fee schedule amount

Medigap

Private supplemental insurance that fills the "gaps" in Original Medicare coverage, such as deductibles, coinsurance, and copays. Policies are standardized and sold by letter (e.g., Plan G, Plan N). Medigap policies generally do not cover prescription drugs.

Also known as: Medicare Supplement Insurance