Medicare Terminology 101 for Senior Insurance Professionals

Glossary of Medicare Terminology

Medicare is new territory for many people and a place where senior insurance brokers can make a significant impact. This blog is a compilation of the most common, need-to-know Medicare terms that insurance professionals can use and share with their prospects and clients to ensure everyone is on the same page.

We’ve broken this list down into three categories:

1. Types of Medicare Coverage
2. Medicare Plans & Programs
3. Medicare Terms

Types of Medicare Coverage

Long-Term Care: Services that include medical and non-medical care provided to people who are unable to perform basic activities of daily living. These services can be provided at home, in the community, in assisted living, or in nursing homes. Medicare and most health insurance plans don’t pay for long-term care.

Medicare: Medicare is the federal health insurance program for:

• People who are 65+
• Certain younger people with disabilities
• People with End-Stage Renal Disease (ESRD)

Medicare Part A (Hospital Insurance): Covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health care.

Medicare Part B (Medical Insurance): Covers certain doctors’ services, outpatient care, medical supplies, and preventive services.

Medicare Part C (Advantage): A type of Medicare health plan offered by a private company that contracts with Medicare. Medicare Advantage plans provides all of your Part A and Part B benefits, with a few exclusions. Medicare Advantage plans include:

• Health Maintenance Organizations (HMO)
• Preferred Provider Organizations (PPO) 
• Private Fee-for-Service Plans (PFFS)
• Special Needs Plans (SNP)
• Medicare Medical Savings Account Plans (MSA)

If you’re enrolled in a Medicare Advantage plan:

• Most Medicare services are covered through the plan
• Most Medicare services aren’t paid for by Original Medicare
• Most Medicare Advantage plans offer prescription drug coverage

Medicare Part D (Drug Coverage): Provides optional benefits for prescription drugs available to all people with Medicare for an additional charge.

Medigap: Medicare Supplement Insurance sold by private insurance companies to fill “gaps” in Original Medicare coverage.

Original Medicare: Original Medicare is a fee-for-service health plan that has two parts: 

• Part A (Hospital Insurance)
• Part B (Medical Insurance)

After you pay a deductible, Medicare pays its share of the Medicare-approved amount, and you pay your share (coinsurance and deductibles).

Medicare Plans & Programs

Medicare Cost Plan: A type of Medicare health plan available in some areas. If you get services outside of the plan's network without a referral, your Medicare-covered services will be paid for under Original Medicare (your Cost Plan pays for emergency services or urgently needed services).

Medicare Health Maintenance Organization (HMO) Plan: A type of Medicare Advantage plan available in some areas of the country. In most HMOs, you can only go to doctors, specialists, or hospitals on the plan's list except in an emergency. Most HMOs also require you to get a referral from your primary care physician.

Medicare Medical Savings Account (MSA) Plan: MSA plans combine a high deductible Medicare Advantage plan and a bank account. The plan deposits money from Medicare into the account. You can use the money in this account to pay for your healthcare costs, but only Medicare-covered expenses count toward your deductible.

Medicare Preferred Provider Organization (PPO) Plan: A type of Medicare Advantage plan available in some areas of the country in which you pay less if you use doctors, hospitals, and other healthcare providers that belong to the plan's network. You can use doctors, hospitals, and providers outside of the network for an additional cost. 

Medicare Private Fee-For-Service (PFFS) Plan: A type of Medicare Advantage plan that determines how much it will pay doctors and hospitals, and how much you must pay when you get care. A Private Fee-For-Service plan is very different than Original Medicare, and you must follow the plan rules carefully when you go for health care services. When you're in a Private Fee-For-Service plan, you may pay more or less for Medicare-covered benefits than in Original Medicare. 

Medicare Savings Program: State-run programs that help people with limited income and resources pay some (or all) of their Medicare premiums, deductibles, and coinsurance.

Medicare Select: A type of Medigap policy that may require you to use hospitals and, in some cases, doctors within its network to be eligible for full benefits.

Medicare Special Needs Plan (SNP): A special type of Medicare Advantage plan that provides more focused and specialized health care for specific groups of people, like those who have both Medicare and Medicaid, who live in a nursing home, or who have certain chronic medical conditions.

Pilot Programs: Special projects, sometimes called demonstrations or research studies, that test improvements in Medicare coverage, payment, and quality of care. 

Program of All-inclusive Care for the Elderly (PACE): A special type of health plan that provides all the care and services covered by Medicare and Medicaid, as well as additional medically necessary care and services based on your needs as determined by an interdisciplinary team. PACE combines medical, social, and long-term care services and prescription drug coverage.

State Health Insurance Assistance Program (SHIP): A state program that gets money from the federal government to give free local health insurance counseling to people with Medicare.

State Pharmaceutical Assistance Program (SPAP): A state program that provides help paying for drug coverage based on financial need, age, or medical condition.

Medicare Terms

Advance Beneficiary Notice of Noncoverage (ABN): In Original Medicare, a notice that a doctor, supplier, or provider gives a person with Medicare before furnishing an item or service if they believe that Medicare may deny payment.

Advance Coverage Decision: A notice you get from a Medicare Advantage plan letting you know in advance whether it will cover a particular service.

Appeal: The action you can take if you disagree with a coverage or payment decision made by Medicare, your Medicare health plan, or your Medicare Prescription Drug plan. You can appeal if Medicare or your plan denies one of these:

• Your request for a health care service, supply, item, or prescription drug that you think you should be able to get
• Your request for payment for a health care service, supply, item, or prescription drug you already got
• Your request to change the amount you must pay for a healthcare service, supply, item, or prescription drug
• If Medicare or your plan stops providing or paying for all or part of a service, supply, item, or prescription drug you think you still need

Assignment: An agreement by your doctor, provider, or supplier to be paid directly by Medicare and not to bill you for any more than the Medicare deductible and coinsurance.

Benefit Period: The way that Original Medicare measures your use of hospital and skilled nursing facility (SNF) services. A benefit period begins the day you're admitted as an inpatient in a hospital or SNF. The benefit period ends when you haven't gotten any care for 60 days in a row. There's no limit to the number of benefit periods.

Claim: A request for payment that you submit to Medicare or other health insurance when you receive items or undergo services that you think are covered by your plan.

Copayment: A fixed amount you may be required to pay as your share of the cost for benefits after you pay any deductibles.

Coverage Determination (Part D): The first decision made by your Medicare drug plan about your drug benefits. The drug plan must give you a prompt decision (72 hours for standard requests, 24 hours for expedited requests). If you disagree with the plan’s coverage determination, the next step is an appeal. These decisions include:

• Whether a particular drug is covered
• Whether you have met all the requirements for getting a requested drug
• How much you’re required to pay for a drug
• Whether to make an exception to a plan rule when you request it

Creditable Coverage: Previous health insurance coverage that can be used to shorten a pre-existing condition waiting period under a Medigap policy.

Creditable Prescription Drug Coverage: Prescription drug coverage that’s expected to pay, on average, at least as much as Medicare drug coverage. This could include drug coverage from a current or former employer or union, TRICARE, Indian Health Service, VA, or individual health insurance coverage.

Deductible: 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.

Durable Medical Equipment (DME): Certain medical equipment, like a walker, wheelchair, or hospital bed, that's ordered by your doctor for use in the home.

Excess Charge: The difference between the amount a doctor, or other healthcare provider, is legally permitted to charge and the Medicare-approved amount. This applies to Original Medicare plans.

Guaranteed Issue Rights: Also known as Medigap protections, these are the rights you have in certain situations when insurance companies are required, by law, to sell or offer you a Medigap policy. In these situations, an insurance company can't deny you a Medigap policy or place conditions on a Medigap policy, like exclusions for pre-existing conditions, and can't charge you more for a Medigap policy because of a past or present health problem.

Lifetime Reserve Days: The additional days that Medicare will pay for when you're in a hospital for more than 90 days under Original Medicare. You have a total of 60 reserve days that can be used during your lifetime. For each lifetime reserve day, Medicare pays all covered costs except for a daily coinsurance.

Limiting Charge: In Original Medicare, the highest amount of money you can be charged for a covered service by doctors and other healthcare suppliers who don't accept assignments. 

Medicare Summary Notice (MSN): A notice you get after the doctor, healthcare provider, or supplier files a claim for Part A or Part B services in Original Medicare. It explains what the doctor, healthcare provider, or supplier billed for, the Medicare-approved amount, how much Medicare paid, and what you must pay.

Medicare-Approved Amount: The payment amount that Original Medicare sets for a covered service or item. When your provider accepts an assignment, Medicare pays its share and you pay your share of that amount.

Medicare-Certified Provider: A healthcare provider (like a home health agency, hospital, nursing home, or dialysis facility) that's been approved by Medicare. Providers are approved or "certified" by Medicare if they've passed an inspection conducted by a state government agency. Medicare only covers care given by providers who are certified.

Medigap Open Enrollment Period: A one-time-only, six-month period when federal law allows you to buy any Medigap policy you want that's sold in your state. It starts in the first month that you're covered under Part B and you're 65+. During this period, you can't be denied a Medigap policy or charged more due to past or present health problems. 

Premium: The periodic payment to Medicare, an insurance company, or a healthcare plan for health or prescription drug coverage.

Prior Authorization: Approval that you must get from a Medicare drug plan before you fill your prescription for the prescription to be covered by your plan. Your Medicare drug plan may require prior authorization for certain drugs.

Supplemental Security Income (SSI): A monthly benefit paid by Social Security to people with limited income and resources who are disabled, blind, or 65+. SSI benefits aren't the same as Social Security retirement or disability benefits.

Urgently Needed Care: Care that you get outside of your Medicare health plan's service area for a sudden illness or injury that needs medical care right away but isn’t life-threatening. If it’s not safe to wait until you get home to get care from a plan doctor, the health plan must pay for the care.

Using the Medicare Terminology Glossary

Understanding Medicare terminology might be second nature to you as an advisor, but it can be daunting for your clients. Keep this glossary handy when selling and servicing your clients. 

Want to take it a step further? Keep detailed notes of your clients’ Medicare preferences and policies in your agency’s AMS. Review this data before each meeting to ensure you’re informed and can have intelligent conversations that make your clients feel seen. You can also utilize workflow automation to send your team notifications of clients that are aging into Medicare. Use this information to proactively reach out and help them make the transition.

AgencyBloc, the #1 Agency Recommended Management Platform helps life and health insurance agencies organize, automate, and grow their business. With a suite of solutions for sales enablement, quoting, client and policy management, commissions processing, and more, your team can work smarter and spend more time focused on customer service, client retention, and other revenue-generating initiatives.

Posted by Allison Babberl on Thursday, August 3, 2023 in Senior Market Insurance

1. client retention
2. quoting
3. selling