Common Insurance Terms (Glossary)

Benefit Period

Measurement of your hospital use. The period begins the day the patient is admitted in a hospital or skilled nursing facility (SNF) and ends when the patient no longer receives inpatient hospital care for 60 days.

Coinsurance

The percentage a patient may be required to pay as a share of the cost for services after deductibles.

Copayment

The fixed amount a patient maybe be required to pay as share of the cost for medical services or supplies (i.e. doctors visits or prescriptions).

Creditable Prescription Drug Coverage

Drug coverage received through insurance prior to your eligibility for Medicare that covers as much as Medicare would cover. When you become eligible for Medicare, you may generally keep this coverage.

Critical Access Hospital

A small facility that provides inpatient and outpatient services on a limited basis for people in rural areas.

Custodial Care

Non-skilled personal care that Medicare does not cover (i.e. bathing, dressing, eating, using the bathroom etc.).

Deductible

The amount the patient must pay for health care and prescriptions before Original Medicare.

Demonstrations

Special projects that usually operate for a limited time in order to test improvements in Medicare coverage, payment, and quality of care.

Extra Help

A Medicare program that helps people with limited income and resources pay premiums, deductibles, and coinsurance.

Formulary (Drug List)

A list of prescription drugs covered by a prescription drug plan or another insurance plan offering prescription drug benefits.

Health Maintenance Organizations (HMOs)

HMOs have their own network of doctors, hospitals and other healthcare providers who have agreed to accept payment at a certain level for any services they provide.

Inpatient Rehabilitation

A hospital that provides an intensive rehabilitation program.

Lifetime Reserve Days

Additional days that Medicare will pay for when the patient is in the hospital for over 90 days. Patients have a total of 60 reserve days that can be used within a lifetime. Medicare covers all costs except for daily coinsurance.

Long-Term Care Hospital

Critical care hospitals that provide treatment for patients staying more than 25 days. Most patients are transferred from the intensive care unit (ICU). Services provided include comprehensive rehabilitation, respiratory therapy, head trauma treatment, and pain management.

Maximum Out of Pocket (MOOP)

Your maximum out-of-pocket limit (also known as a MOOP)  is the limit on annual out-of-pocket expenditures paid by a health plan enrollee for medical services that are covered by a health insurance plan. After a MOOP is satisfied during a given plan year, the health insurance plan enrollee does not pay additional cost-sharing for covered medical services until the next coverage period (which often begins at the start of a new calendar year). A MOOP is a tool to protect a health plan enrollee from catastrophic medical costs that can occur despite the presence of health insurance coverage.

Medically Necessary

The health care needed to diagnose or treat an illness, injury, condition, or disease that meet accepted standards of medicine.

Medicare-Approved Amount

In Original Medicare, this is the amount a doctor or supplier can be paid. Medicare pays part of this amount and the patient is responsible for the difference.

Over The Counter Medications (OTC)

Refers to a medicine that can be bought without a prescription (doctor's order)

Preferred Provider Organization (PPO)

Just like an HMO, or health maintenance organization, a PPO plan offers a network of healthcare providers you can use for your medical care. These providers have agreed to provide care to the plan members at a certain rate

Premiums

The periodic payment to Medicare, an insurance company, or a health care plan.

Preventative Service

Health care to prevent illness or detect illness at an early stage (i.e. mammograms, flu shots, pap tests).

Primary Care Doctor

The doctor patients see first for most health problems. In many Medicare Advantage Plans, the patient must see the primary care doctor before seeing any other health care provider.

Referral

A written order from a primary care doctor to see a specialist or get specific medical services. In many Health Maintenance Organizations (HMOs), if the patient does not get a referral first, the plan may not pay for the services.

Specialists

A doctor or other health care professional who is trained and licensed in a special area of practice

Service Area

A geographic area where a health insurance plan accepts members if it limits membership based on location.

Skilled Nursing Facility (SNF) Care

Skilled nursing care and rehabilitation services provided on a daily basis is a SNF (i.e. physical therapy or injections that can only be given by a registered nurse (RN) or doctor).

True out-of-pocket (TrOOP)

True out-of-pocket (TrOOP) costs are the payments that count toward a person's Medicare drug plan out-of-pocket threshold