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Medicare Glossary

Annual Election Period is the period from November 15 to December 31 when you can sign up for a plan or switch to another Medicare health plan or Medicare Prescription Drug Plan.

Beneficiary is a person who qualifies for Medicare and receives Medicare benefits from any of the plans. Usually an individual becomes a Medicare beneficiary on his/her 65th birthday, or earlier in case of disabilities.

Brand-name Drug is a prescription drug that is sold by the company which was the first to get Food and Drug Administration's approval to distribute this drug as safe and effective. A company is usually allowed to sell the drug for several years before other company will have a right to produce and distribute its generic variations.

Charge Limit (also Limiting Charge) is the limit Medicare sets on how much you can be charged for receiving medical treatment. The charge limit is usually over 15% of the Medicare approved amount.

Co-insurance is the percentage that you pay for any covered medical services in conjunction with Medicare which pays its share first. Co-insurance goes into force only after you have paid the deductible and co-payment.

Co-payment (Co-pay) is a fixed fee you pay for the services rendered (including a doctor visit or a prescription). Most plans pay 100% for the services you receive after the co-payment. But there can be limits depending on how the plan is set up. You can pay 10% for each service you receive.

Core Benefits is a standardized set of benefits offered by all Medigap Plans, A through L, covering most fees you would be charged for health care services which are not covered by the Original Medicare Plan.

Cost-sharing is the portion of a Medicare beneficiary's health care costs that the beneficiary is responsible for paying after Medicare pays for its share of the billed charge. Cost-sharing can be in the form of co-insurance, co-payments, premiums and deductibles.

Deductible is a fixed amount you have to pay in before your insurance starts to cover the medical services you receive.

Excess Charges (Excess Costs) - the difference between the Medicare-approved charges and the actually billed charge.

Formulary is a list of prescription drugs that are covered in accordance with your plan. The formulary offered by any drug coverage plan is to include two drugs of one and the same kind. Otherwise, the drug of this type must be excluded from coverage under Part D.

General Enrollment Period is the period from January 1 through March 31 of any year following the year when you turn 65 and have an opportunity to submit an application for Medicare.

Generic Drug is a prescriptive drug that has the same ingredient formula as the corresponding brand-name drug. Generic drugs are approved by Food and Drug Administration. They usually cost less than brand-name drugs.

Hospice Care is an establishment that helps to cater to the needs of terminally ill people and the program ensuring relevant services.

Initial Enrollment Period is the period when you become first eligible for Medicare beginning three months before your 65-th birthday, continuing the month of your birthday and three months after it. If you sign up for Medicare within the Initial Enrollment Period, you will incur no penalties, no matter what if you have Medical Insurance or Prescription Drug Coverage through Medicare.

In-Network / Par / Participating Providers are providers of medical services who work under contract with Medicare and have established connections with your insurance company.

Medicare Advantage Plans (MA), also referred to as Medicare Part C, are special plans offered to Medicare beneficiaries by private companies which work in conjunction with Medicare and cover the full range of hospital and doctor services covered in Original Medicare. They also may reimburse you for extra costs beyond the Medicare-approved amount. The most notable Medicare Advantage Plans are Health Maintenance Organization, Preferred Provider Organization, Fee-for-Service Plan, Medicare Cost Plan and Medical savings Account.

Medicare Advantage Prescription Drug (MA-PD) Plan is a Medicare Plan offering a Part D prescription drug benefit in conjunction with such plans as Health Maintenance Organization, Preferred Provider Organization or a private Fee-for-Service Plan.

Medicare Prescription Drug Plan (PDP) is a stand-alone plan offered under Medicare Part D to provide a prescription drug benefit.

Medigap is a Medicare supplemental insurance program offered by private companies, aimed at filling the gaps in Original Medicare and providing hospital, doctor and drug coverage benefits that the latter does not.

Original Medicare Plan is the traditional Fee-for-Service arrangement according to which services offered by Medicare Part A (Hospital Insurance) and Part B (Medical Insurance) are covered.

Out-of-Network / Non-Par / Non Participating Providers are medical providers without an established connection with an insurance company which offers a particular plan in the area.

Out-of-Pocket Costs are the costs for the services which are not included in your insurance plan. Sometimes you may have to pay out-of-pocket costs if the cost of the service you need exceeds the Medicare-approved amount.

Premium is a monthly amount you pay for receiving benefits offered by Medicare Part B and Part D.

"Reasonable and Necessary" Care means the services which are covered by Medicare Part A (Hospital Insurance) required for the diagnosis or treatment of a particular disease. Utilization Review Committee is the highest body responsible for determining what is "reasonable and necessary" in a particular medical situation. Your physician will inform you about the services that are regarded as "reasonable and necessary"for your diagnosis.

Skilled Nursing Facility is a medical institution that continuously provides inpatient nursing care and related services to people recuperating from a serious disease or an injury.

Preexisting Condition Exclusion is the situation when an individual cannot be exposed to a Health Insurance coverage due to a medical condition he/she had before signing up for Medicare.

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