Medicare terms you should know

Part A, Part B, AEP, IEP, SEP—learning about Medicare can sometimes feel more like looking at a bowl of alphabet soup. But it’s important to understand the key terms and acronyms that are used when talking about Medicare. To help you or your loved one understand the language of Medicare, check out the helpful information below.

Let’s start with the basics: our ABC and Ds. Medicare has four different “parts.” Each part is labeled using a letter of the alphabet.

• Part A – Hospital insurance.
• Part B – Doctor and outpatient insurance. Together, Part A and Part B make up Original Medicare.
• Part C – Medicare Advantage plans. Offered by private insurance companies, these plans give you the benefits of Original Medicare and may offer extras, like dental coverage or wellness services.
• Part D – Medicare prescription drug coverage. You can get this in a standalone plan or included in a Medicare Advantage plan.

When it comes to talking about paying for Medicare, there are a few terms you should be aware of.

• Premiums – a fixed amount you pay to either Medicare or a private insurance company.
• Deductibles – a set amount you pay out-of-pocket for covered health services before your plan begins to pay.
• Copay – A fixed amount you pay at the time you receive a covered service. Amounts can vary by the coverage you use and service you get.
• Coinsurance – you and your plan split costs sometimes, and a coinsurance is the percentage you pay. For example, your coinsurance rate may be 20 percent while your plan pays the remaining 80 percent of the total cost for the service.

A final cost term to know is “benefit period.” A benefit period is how Part A measures your use of inpatient hospital and skilled nursing facility services.

Acronyms are used commonly in Medicare. The most important acronyms to consider when you’re preparing to enroll in a Medicare plan fall into two main categories: enrollment period acronyms and plan type acronyms.

IEP – Initial Enrollment Period. Your IEP might fall during the Medicare AEP (see below). If you’re “aging into” Medicare, your IEP will center on your 65th birthday. If you qualify for Medicare because of a disability or other special circumstance, your IEP might depend on a different date, like the date you started receiving disability benefits.

AEP – Annual Enrollment Period. The Medicare AEP happens each year from October 15 – December 7. At this time, Medicare beneficiaries can generally add, switch or drop coverage.

SEP – Special Enrollment Period. This is an enrollment period outside of “regular” enrollment periods like the IEP or OEP. You must meet certain requirements to qualify for a SEP.

MA OEP – Medicare Advantage Open Enrollment Period. The Medicare Advantage Open Enrollment Period happens January 1 – March 31. During this time, Medicare Advantage members can make changes to their Medicare Advantage coverage if they want.

MA – Medicare Advantage plan

MAPD – Medicare Advantage plan with Prescription Drug coverage

Also called Medicare Part C, these are Medicare plans offered by private insurance companies. They give you all the coverage of Original Medicare, and may offer extra benefits, too. The main types are:

Coordinated care plans

• HMO – Health Maintenance Organization. With an HMO, you usually have to use doctors and hospitals within the plan’s network to make sure the plan covers your care.
• POS – Point of Service. This is a type of HMO plan that lets members go outside the network for some covered services. You might have to pay a higher copayment or coinsurance for those services.
• PPO – Preferred Provider Organization. With this type of plan, you can use doctors and hospitals inside or outside of the network. If you go outside the network, you may pay a larger share of the cost of your care.
• SNP – Special Needs Plans. A type of Medicare Advantage plan that serves people with special health care needs, like ESRD (End Stage Renal Disease) or diabetes.

Other plans

• PFFS – Private Fee-For-Service. Allows you to visit any Medicare-eligible doctor, hospital or health care provider who accepts the plan’s payment terms and conditions.
• MSA – Medical Savings Account. Combines a special medical savings account with a high-deductible Medicare Advantage plan.
• PDP – Prescription Drug Plan. Also called Medicare Part D, this is a standalone plan that helps you pay for prescription drugs.