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Medicare Terminology

Medicare Glossary

Medicare terms explained in plain words. Look up anything you run into while comparing plans or signing up.

A

Annual Enrollment Period (AEP)
The main Medicare open enrollment window, October 15 – December 7 each year. During AEP, you can switch Medicare Advantage plans, change Part D plans, or move between Medicare Advantage and Original Medicare. Changes take effect January 1.

B

Benefit Period
How Medicare measures your use of hospital and skilled nursing facility services. A benefit period begins the day you're admitted and ends when you haven't received inpatient care for 60 consecutive days. Each benefit period has its own Part A deductible.

C

C-SNP (Chronic Condition Special Needs Plan)
A Medicare Advantage plan designed for people with specific chronic conditions like diabetes, COPD, or heart disease. C-SNPs offer tailored benefits and care coordination for the qualifying condition.
Coinsurance
Your share of the cost for a covered healthcare service, calculated as a percentage. For example, after meeting your deductible, you might pay 20% and Medicare pays 80%.
Copay (Copayment)
A fixed dollar amount you pay for a covered healthcare service, for example, $20 for a primary care visit.
Creditable Coverage
Drug coverage that's at least as good as Medicare's standard Part D coverage. If you have creditable coverage from an employer or union, you can delay Part D enrollment without penalty.

D

D-SNP (Dual Eligible Special Needs Plan)
A Medicare Advantage plan for people enrolled in both Medicare and Medicaid. D-SNPs coordinate benefits from both programs and often offer additional services like transportation and OTC allowances.
Deductible
The amount you pay for covered health services before your insurance starts paying. Medicare Part A has a per-benefit-period deductible; Part B has an annual deductible.
Dual Eligible
A person who qualifies for both Medicare and Medicaid. There are different levels of dual eligibility (full dual, QMB, SLMB, QI) with different levels of Medicaid assistance.

E

Enrollment Period
A specific window of time during which you can sign up for, switch, or drop Medicare coverage. Outside these windows, changes are generally not allowed.
Extra Help (LIS)
A federal program that helps people with limited income and resources pay for Part D prescription drug costs. Also called the Low Income Subsidy (LIS). Full dual-eligible beneficiaries qualify automatically.

F

Formulary
A list of prescription drugs covered by a Medicare drug plan (Part D or Medicare Advantage with drug coverage). Drugs are organized into tiers that determine your out-of-pocket costs.

I

IRMAA
Income-Related Monthly Adjustment Amount. A surcharge added to Part B and Part D premiums for people with higher incomes. The surcharge is based on your income from two years prior.
Initial Enrollment Period (IEP)
The 7-month window around your 65th birthday when you can first enroll in Medicare. Includes the 3 months before your birthday month, your birthday month, and the 3 months after.

L

Late Enrollment Penalty
A permanent increase to your Part B or Part D premium for failing to enroll when first eligible (without qualifying creditable coverage). Part B: 10% per 12-month gap. Part D: 1% per month without coverage.

M

Medicaid
A joint federal-state program providing health coverage to people with limited income and resources. Medicaid is administered by each state. Idaho's program runs through the Idaho Department of Health and Welfare.
Medicare
Federal health insurance for people 65 or older, certain disabled individuals, and people with End-Stage Renal Disease (ESRD). Divided into Parts A, B, C, and D.
Medicare Advantage (Part C)
An alternative to Original Medicare offered by private insurers. Must cover all Part A and Part B benefits and usually includes drug coverage (Part D). Plans may add dental, vision, and hearing benefits.
Medicare Supplement (Medigap)
Private insurance sold to help pay for costs that Original Medicare doesn't cover, such as copays, coinsurance, and deductibles. Standardized plans are sold under letter names (Plan G, Plan N, etc.).
Medigap Open Enrollment Period
The 6-month period starting when you're first enrolled in Part B at age 65 or older. During this window, insurers cannot deny you Medigap coverage or charge more based on pre-existing conditions.

N

NPN (National Producer Number)
A unique identifier assigned to insurance agents and agencies by NIPR. Used to verify license status. Payton Knudson NPN: 22155246. Knudson Insurance Team, LLC NPN: 22233515.

O

Open Enrollment Period (OEP)
January 1 – March 31 each year. Allows people enrolled in Medicare Advantage to switch plans or return to Original Medicare. Cannot be used to switch from Original Medicare to Medicare Advantage.
Out-of-Pocket Maximum (MOOP)
The most you'll have to pay for covered services in a plan year under a Medicare Advantage plan. Once you reach the MOOP, the plan pays 100% of covered costs. Original Medicare has no out-of-pocket cap.

P

Part A
Hospital Insurance. Covers inpatient hospital care, skilled nursing facility care (limited), hospice, and some home health. Most people don't pay a Part A premium.
Part B
Medical Insurance. Covers outpatient care, doctor visits, preventive services, and medically necessary services. Has a monthly premium (~$203/month standard in 2026) and annual deductible.
Part D
Prescription Drug Coverage. Offered by private insurers approved by Medicare. Required for most people who want drug coverage. Has a monthly premium, deductible, and copays that vary by plan.
Premium
The monthly amount you pay for Medicare or insurance coverage, regardless of whether you use medical services.
Prior Authorization
A requirement that your doctor get approval from your insurance plan before providing certain treatments, medications, or services. Common in Medicare Advantage plans.

Q

QMB (Qualified Medicare Beneficiary)
A Medicaid program that helps pay Part A and Part B premiums, deductibles, and copays for qualifying low-income Medicare beneficiaries. Providers cannot bill QMB enrollees for Medicare cost-sharing.

S

SHIP (State Health Insurance Assistance Program)
A federally funded program that provides free, unbiased counseling to people with Medicare. Idaho SHIP: 1-800-247-4422. SHIP counselors do not sell insurance.
SLMB (Specified Low-Income Medicare Beneficiary)
A Medicaid program that helps pay Part B premiums for qualifying low-income Medicare beneficiaries. Income limits are slightly higher than QMB.
Special Enrollment Period (SEP)
A window outside the standard enrollment periods that allows you to make Medicare plan changes due to qualifying life events (e.g., moving, losing employer coverage, qualifying for Medicaid).

T

TPMO (Third Party Marketing Organization)
An entity that markets Medicare plans on behalf of insurance carriers. As a TPMO, Knudson Insurance Team is required by CMS to disclose which carriers it represents and to provide information about Medicare.gov and SHIP resources.

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