Medicare Glossary

Assignment

An agreement by a doctor, supplier, or provider to accept the Medicare-approved amount as full payment for a covered service. Providers who accept assignment cannot bill you for more than that amount, aside from normal deductibles and coinsurance.

Brand-name drug

A prescription drug sold under its trademarked name. Brand-name drugs are typically more expensive than generic alternatives and may be in a higher formulary tier, requiring a higher copay or coinsurance under Part D.

Coinsurance

The percentage of costs you pay for a covered health care service after you have paid your deductible. For example, under Original Medicare Part B, you pay 20% of the Medicare-approved amount for most doctor services.

Cost-sharing

The share of costs covered by your insurance that you pay out of your own pocket. This term generally includes deductibles, coinsurance, and copays — but not premiums.

Gap Coverage

See Medigap / Medicare Supplement Insurance. Coverage that helps pay the out-of-pocket costs (gaps) not covered by Original Medicare, such as deductibles, coinsurance, and copays.

Also known as: Medigap, Medicare Supplement

Hospital Outpatient Services

Medical and surgical services provided at a hospital or clinic when you are not admitted as an inpatient. Covered under Medicare Part B. You pay coinsurance or copays for outpatient services.

Also known as: Outpatient services

Lifetime Reserve Days

Under Medicare Part A, you have 60 additional inpatient hospital days you can use over your lifetime after you use up the regular covered days in a benefit period. Once used, these days cannot be renewed. You pay a daily coinsurance for each lifetime reserve day.

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-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

Qualified Medicare Beneficiary (QMB)

A Medicare Savings Program for people with the lowest incomes. If you qualify as a QMB, your state pays your Part A and Part B premiums, and providers who accept Medicare cannot charge you copays, coinsurance, or deductibles.

Also known as: QMB

Skilled Nursing Facility (SNF)

A facility that provides short-term skilled care and therapy after a qualifying 3-day inpatient hospital stay. Medicare Part A covers SNF care for up to 100 days per benefit period, with no copay for days 1–20 and a daily coinsurance for days 21–100.

Also known as: SNF, Nursing home (short-term)

Tier

A level in a Part D formulary that determines how much you pay for a drug. Most plans have 4–5 tiers. Generic drugs are typically in lower tiers with lower copays; brand-name and specialty drugs are in higher tiers with higher copays or coinsurance.

Also known as: Drug tier