Senior Health Insurance Glossary


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Beneficiary

The person covered by an insurance policy.

Benefit Period

A benefit period is a length of time Medicare will cover your health care. The start of this period is the first day you enter a hospital or skilled nursing facility. You’ll then have 100 days of covered care. The first 20 days are provided at no extra cost and the remaining 80 days require a copayment. The benefit period restarts after you’ve gone 60 days without any further care.

Carrier

A privately-run insurance company. Medicare Supplement and Prescription Drug Plans are sold and managed by private insurance carriers.

Coinsurance

Coinsurance is a percentage of the total bill for a medical service. You are responsible for paying the coinsurance.

Copayment

A copayment is a fixed-dollar amount you are responsible for paying when you receive a medical service.

Custodial Care

This refers to assistance with daily tasks — such as bathing, eating, or getting in and out of bed. Medicare typically doesn’t pay for custodial care. It is also sometimes referred to as “non-skilled care.”

Deductible

A deductible is an amount you have to pay of your medical bills before your insurance coverage begins paying your health care expenses. You will typically be required to meet a deductible every year your policy is in effect.

Durable Medical Equipment

Durable medical equipment includes things such as in-home oxygen supplies, walkers, wheelchairs, hospital beds, neck and back braces, and prosthetics.

End-Stage Renal Disease (ESRD)

A kind of kidney failure. End-stage renal disease requires dialysis or a kidney transplant. Patients with ESRD qualify for Medicare coverage at any age.

Formulary

A list of prescription medications covered by a health plan or Prescription Drug Plan. Learn more about formularies here.

Home Health Care

Medical care provided in your home. This may include physical therapy, nursing care, and health aide services. Durable medical equipment and other medical supplies are often considered part of home health care.

Inpatient Care

Care you receive when you are admitted overnight in a hospital or nursing facility.

Long-Term Care

The medical care and living assistance for senior citizens and disabled Americans. It includes long-term skilled nursing care and non-skilled custodial care provided at home or in a nursing facility. Non-skilled custodial care is not covered by Medicare. Learn more about long-term care here.

Medicaid

A program that provides low-income Americans assistance with medical costs. In some circumstances, you may qualify for both Medicare and Medicaid.

Medicare Advantage Plan

A private health plan that provides the same coverage as Medicare Part A and Part B, and typically some additional benefits.

Medicare Prescription Drug Plan

A private plan that offers coverage for prescription drugs. Medicare beneficiaries may enroll in a stand-alone Prescription Drug Plan (PDP) or a Medicare Advantage plan with prescription drug coverage (MA-PD). These plans are regulated by the federal government, but sold and managed by private insurance carriers.

Medicare SELECT

A Medicare Supplement plan that requires you to receive care from a specific network of doctors, hospitals, and specialists.

Medigap

Medicare Supplement insurance sold by private insurance companies to fill “gaps” in Original Medicare Plan coverage. Except in Massachusetts, Minnesota, and Wisconsin there are 12 standardized plans labeled Plan A through Plan L. Medigap policies only work with the Original Medicare Plan.

Non-Formulary Drugs

Any prescription drug that is not included on your health plan’s list of approved medications.

Open Enrollment Period

A six-month period during which you cannot be denied coverage under any private Medicare Supplement plan. The open enrollment period starts when you enroll in Medicare Part B and are 65 or older. There is also a prescription drug open enrollment period during which you can purchase a new plan or switch coverage. This period lasts every year from October 15 to December 7.

Outpatient Hospital Care

Medical care received from a hospital or health care facility that doesn’t require you to stay overnight.

Pre-Existing Condition

Any health problem you had before you applied for an insurance plan.

Premium

A regular payment made to keep your insurance coverage in effect. Premiums are typically paid monthly.

Primary Care Physician (PCP)

Often a general practitioner, your Primary Care Physician is the doctor you see for routine care. In some managed care plans, you’ll need a referral from your Primary Care Physician in order to have coverage for hospital or specialist care. Learn more about Primary Care Physicians here.

Referral

A written notice from your doctor instructing you to receive care from a hospital or specialist. Some managed care plans won’t cover specialist or hospital care without a referral.

Skilled Care

Medically-necessary care provided by a nurse or trained medical staff.

Skilled Nursing Care

Medically-necessary care performed by a licensed nurse.

Special Election Period

A period of time during which you can change your Medicare Advantage plan or choose to re-enroll in Original Medicare. You can make this change if you move outside your current plan’s service area, if your plan provider does not renew its contract with the federal government, and in other special circumstances determined by the Centers for Medicare and Medicaid Services. The Special Election Period is different from the Special Enrollment Period (see below).

Special Enrollment Period

A period of time during which you can enroll in Medicare Part B other than the Initial Enrollment Period. The main reason not to enroll during the Initial Enrollment Period is because you were covered under an existing group plan provided by an employer. The Special Enrollment Period lasts for 8 months after your group coverage or your employment ends, whichever comes first.

Specialist

A doctor who treats specific illnesses or parts of the body. Dermatologists, cardiologists, and orthopedic surgeons are all examples of medical specialists.

Tiers

Most health plans have multiple levels of coverage for prescription drugs. These levels are called “tiers.” For example:

Tier 1 – Generic drugs
Tier 2 – Preferred brand-name drugs
Tier 3 – Non-preferred brand-name drugs
Tier 4 – Specialty drugs

Tier 1 drugs have the lowest costs, while Tier 3 and 4 drugs will be the most expensive.

Urgently Needed Care

Any health care needed because of a sudden illness or injury, even if that illness or injury is not life threatening. Often, urgently needed care will be provided by your Primary Care Physician.

If you are outside of your plan’s service area and the care cannot wait, your health insurance plan will generally cover the urgently needed care. But it’s best to contact your Primary Care Physician first.