These definitions have been selected from Medicare & You 2009, published by the Centers for Medicare & Medicaid Services. You can download or order a copy of this publication from www.medicare.gov by clicking on “Find a Medicare Publication” and searching by the Publication ID 10050.

Appeal—A special kind of complaint you make 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 you request a healthcare service, supply, or prescription that you think you should be able to get, or if you request payment for healthcare you already got, and Medicare or your plan denies the request. You can also appeal if you are already getting coverage and Medicare or the plan stops paying.

Benefit Period—The way that the Original Medicare Plan measures your use of hospital and skilled nursing facility (SNF) services. A benefit period begins the day you go to a hospital or skilled nursing facility. The benefit period ends when you haven’t received any inpatient hospital care (or skilled care in a SNF) for 60 days in a row. If you go into a hospital or a skilled nursing facility after one benefit period has ended, a new benefit period begins. You must pay the inpatient hospital deductible for each benefit period. There is no limit to the number of benefit periods, although inpatient mental health care in a psychiatric hospital is limited to 190 days in a lifetime.

Coinsurance—An amount you may be required to pay for services after you pay any plan deductibles. In the Original Medicare Plan, this is a percentage (like 20%) of the Medicare-approved amount. You have to pay this amount after you pay the Part A and/or Part B deductible. In a Medicare Prescription Drug Plan, the coinsurance will vary by plan and will depend on how much you have spent.

Copayment—An amount you pay in some Medicare health and prescription drug plans, for each medical service, like a doctor’s visit, or prescription. A copayment is usually a set amount. For example, you could pay $10 or $20 for a doctor’s visit or prescription. Copayments are lower for people with Medicaid and people who qualify for extra help. Copayments are also used for some hospital outpatient services in the Original Medicare Plan.

Creditable Prescription Drug Coverage—Prescription drug coverage (for example, from an employer or union) that is expected to pay, on average, at least as much as Medicare's standard prescription drug coverage.  People who have this kind of coverage when they become eligible for Medicare can generally keep that coverage without paying a penalty, if they decide to enroll in Medicare prescription drug coverage later.

Critical Access Hospital—A small facility that provides outpatient services, as well as inpatient services on a limtied basis, to people in rural areas.

Custodial Care—Nonskilled personal care, such as help with activities of daily living like bathing, dressing, eating, getting in or out of a bed or chair, moving around, and using the bathroom.  It may also include the kind of health-related care that most people do themselves, like using eye drops.  In most cases, Medicare doesn't pay.

Deductible—The amount you must pay for healthcare or prescriptions, before the Original Medicare Plan, your prescription drug plan, or other insurance begins to pay. For example, in the Original Medicare Plan, you pay a new deductible for each benefit period for Part A and each year for Part B. These amounts can change every year. People who qualify for extra help either pay no deductible, or a small deductible for prescription drug coverage.

Durable Medical Equipment (DME)—Certain medical equipment that is ordered by your doctor for use in the home. Examples are walkers, wheelchairs, or hospital beds. DME is paid for under both Part A and Part B for home health services.

Extra Help—A Medicare program to help people with limited income and resources pay Medicare prescription drug program costs, such as premiums, deductibles, and coinsurance.

Formulary—A list of drugs covered by a plan.

Inpatient Rehabilitation Facility—A hospital, or part of a hospital that provides an intensive rehabilitation program.

Institution—A facility that meets Medicare's definition of a long-term care facility, such as a nursing facility or skilled nursing facility, not including assisted or adult living facilities, or residential homes.

Lifetime Reserve Days—In Original Medicare, these are additional days that Medicare will pay for when you are in a hospital for more than 90 days. 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.

Long-Term Care—A variety of services that help people with health or personal needs and activities of daily living over a period of time. Long-term care can be provided at home, in the community, or in various types of facilities, including nursing homes and assisted living facilities. Most long-term care is custodial care. Medicare doesn’t pay for this type of care if this is the only kind of care you need.

Medically Necessary—Services or supplies that are needed for the diagnosis or treatment of your medical condition and meet accepted standards of medical practice.

Medicare Advantage Plan (Part C)—A type of Medicare health plan offered by a private company that contracts with Medicare to provide you with all your Medicare Part A and Part B benefits. Also called “Part C,” Medicare Advantage Plans include Health Maintenance Organizations, Preferred Provider Organizations, Private Fee-for-Service Plans, Special Needs Plans, and Medicare Medical Savings Account Plans. If you are enrolled in a Medicare Advantage Plan, Medicare services are covered through the plan, and aren’t paid for under the Original Medicare Plan. Most Medicare Advantage Plans offer prescription drug coverage.

Medicare-approved Amount—In the Original Medicare Plan, this is the amount a doctor or supplier that accepts assignment can be paid. It includes what Medicare pays and any deductible, coinsurance, or copayment that you pay. It may be less than the actual amount a doctor or supplier charges.

Medicare Health Maintenance Organization (HMO)—A type of Medicare Advantage Plan (Part C) available in some areas of the country. Plans must cover all Part A and Part B healthcare. Many HMOs cover extra benefits, like extra days in the hospital. In most HMOs, you can only go to doctors, specialists, or hospitals on the plan’s list except in an emergency. Your costs may be lower than in the Original Medicare Plan.

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 in the account. You can use it to pay your medical expenses until your deductible is met.

Medicare Preferred Provider Organization (PPO) Plan—A type of Medicare Advantage Plan (Part C) available in a local or regional area in which you pay less if you use doctors, hospitals, and providers that belong to the network. You can use doctors, hospitals, and providers outside of the network for an additional cost. Many Medicare Advantage Plans are PPOs.

Medicare Prescription Drug Plan (Part D)—A stand-alone drug plan that adds prescription drug coverage to the Original Medicare Plan, some Medicare Cost Plans, some Medicare Private-Fee-for-Service Plans, and Medicare Medical Savings Account Plans. These plans are offered by insurance companies and other private companies approved by Medicare. Medicare Advantage Plans may also offer prescription drug coverage that must follow the same rules as Medicare Prescription Drug Plans.

Medicare Private Fee-For-Service (PFFS) Plan—A type of Medicare Advantage Plan (Part C) in which you may go to any Medicare-approved doctor or hospital that accepts the plan’s payment. The insurance plan, rather than the Medicare Program, decides how much it will pay and what you pay for the services you get. You may pay more or less for Medicare-covered benefits. You may have extra benefits the Original Medicare Plan doesn’t cover.

Medicare Special Needs Plan (SNP)—A special type of Medicare Advantage Plan (Part C) that provides more focused and specialized healthcare for specific groups of people, such as those who have both Medicare and Medicaid, who reside in a nursing home, or have certain chronic medical conditions.

Medicare Savings Program—Medicaid program that helps people with limited income and resources pay some or all of their Medicare premiums and deductibles.

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

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

Original Medicare Plan—The Original Medicare Plan has two parts: Part A (Hospital Insurance) and Part B (Medical Insurance). It’s a fee-for-service health plan. You must pay the deductible. Medicare pays its share of the Medicare-approved amount, and you pay your share (coinsurance and deductibles).

Penalty—An amount added to your monthly premium for Medicare Part A and/or Part B, or for a Medicare drug plan (Part D), if you don’t join when you’re first eligible. You pay this higher amount as long as you have Medicare. There are some exceptions.

Point-of-Service—A Health Maintenance Organization (HMO) option that lets you use doctors and hospitals outside the plan for an additional cost.

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

Preventive Services—Healthcare to prevent illness or detect illness at an early stage, when treatment is likely to work best (for example, preventive services include Pap tests, flu shots, and screening mammograms).

Primary Care Doctor—Your primary care doctor is the doctor you see first for most health problems. He or she makes sure you get the care you need to keep you healthy. He or she also may talk with other doctors and health care providers about your care and refer you to them. In many Medicare Advantage Plans, you must see your primary care doctor before you see any other healthcare provider.

Programs of All-Inclusive Care for the Elderly (PACE)—A program that combines medical, social, and long-term care services to help frail people stay independent and living in their community as long as possible, while getting the high-quality care they need. PACE is available only in states that have chosen to offer it under Medicaid.

Quality Improvement Organization (QIO)— A group of practicing doctors and other healthcare experts paid by the Federal government to check and improve the care given to people with Medicare. Healthcare Quality Strategies, Inc., (HQSI) is the QIO for New Jersey.

Referral—A written order from your primary care doctor for you to see a specialist or get certain services. In many HMOs, you need to get a referral before you can get care from anyone except your primary care doctor. If you don’t get a referral first, the plan may not pay for your care.

Service Area—The area where a plan accepts members. For plans that require you to use their doctors and hospitals, it’s also the area where services are provided. The plan may disenroll you if you move out of the plan’s service area.

Skilled Nursing Facility (SNF) Care—This is a level of care that requires the daily involvement of skilled nursing or rehabilitation staff. Examples of skilled nursing facility care include intravenous injections and physical therapy. The need for custodial care (such as help with activities of daily living, like bathing and dressing) cannot qualify you for Medicare coverage in a skilled nursing facility if that’s the only care you need. However, if you qualify for coverage based on your need for skilled nursing care or rehabilitation, Medicare will cover all of your care needs in the facility, including help with activities of daily living.

Special Enrollment Period—A time when a person who didn’t sign up for Medicare coverage under Part A, Part B, or Part D when first eligible can sign up without waiting for a general enrollment period. In most cases, the person can also sign up without paying a penalty (higher premium).

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.

Supplemental Security Income (SSI)—A monthly benefit paid by Social Security to people with limited income and resources who are disabled, blind, or age 65 or older. SSI benefits aren’t the same as Social Security benefits.

Telemedicine—Medical or other health services given to a patient using a communications system (like a computer, telephone, or television) by a practitioner in a location different than the patient’s.

TTY—A teletypewriter (TTY) is a communication device used by people who are deaf, hard-of-hearing, or have a severe speech impairment. People who don’t have a TTY can communicate with a TTY user through a message relay center (MRC). An MRC has TTY operators available to send and interpret TTY messages.