Medicare Glossary: Plain-English Definitions
Medicare has its own vocabulary, and the terms are easy to mix up. This glossary defines the words you will meet when comparing Medicare Supplement plans, choosing drug coverage, and shopping for a medical alert system. Dollar amounts are the 2026 figures published by CMS.
A
- Annual Enrollment Period (AEP)
- The yearly window, October 15 to December 7, when anyone with Medicare can change Medicare Advantage or Part D plans for the following year.
- Attained-Age Rating
- A Medigap pricing method where your premium is based on your current age and rises as you get older. It is the most common method nationwide.
B
- Birthday Rule
- A state law that gives Medigap policyholders a yearly window around their birthday to switch to an equal or lesser plan without medical underwriting. California, Florida, and Oregon have versions of it.
C
- Coinsurance
- Your share of a covered cost, expressed as a percentage. Under Part B you typically pay 20% of the Medicare-approved amount after the deductible.
- Community Rating
- A Medigap pricing method where everyone pays the same premium for a plan regardless of age or health.
- Copayment
- A fixed dollar amount you pay for a service, such as up to $20 for some office visits under Medigap Plan N.
- Creditable Coverage
- Prescription drug coverage that is expected to pay at least as much as standard Medicare Part D. Having it can help you avoid the Part D late enrollment penalty.
D
- Deductible
- The amount you pay before coverage begins. In 2026 the Part A deductible is $1,736 per benefit period and the Part B deductible is $283 per year.
E
- Excess Charge
- The extra amount, up to 15% above the Medicare-approved rate, that a provider who does not accept assignment may bill you for Part B services.
- Extra Help
- A federal program, also called the Low-Income Subsidy, that helps people with limited income and resources pay Part D premiums, deductibles, and copayments.
F
- Fall Detection
- A medical alert feature that senses a fall and contacts a monitoring center automatically, without a button press. It does not catch every fall.
- Formulary
- The list of prescription drugs a Part D or Medicare Advantage drug plan covers, usually organized into cost tiers.
G
- Guaranteed Issue
- A right to buy a Medigap policy without medical underwriting. The insurer must accept you and cannot charge more because of your health.
H
- High-Deductible Plan G
- A Medigap option with lower premiums that pays nothing until you meet an annual deductible ($2,950 in 2026), after which it covers the same benefits as Plan G.
I
- An extra amount added to Part B and Part D premiums for people whose income, from two years earlier, is above set thresholds.
- Initial Enrollment Period (IEP)
- The seven-month window around your 65th birthday, starting three months before your birthday month, when you can first enroll in Medicare.
- Issue-Age Rating
- A Medigap pricing method where your premium is based on the age you were when you bought the policy and does not rise with age.
L
- Late Enrollment Penalty
- A permanent increase to your Part B or Part D premium if you delay enrolling without qualifying coverage. Part B adds 10% for each full 12-month period you could have enrolled.
M
- Medicaid
- A joint federal and state program that helps people with limited income and resources pay for healthcare, including long-term care in many states.
- Medical Underwriting
- An insurer's review of your health history to decide whether to accept your application and at what price. Medigap insurers can use it outside guaranteed-issue windows in most states.
- Medicare Advantage (Part C)
- A private-plan alternative to Original Medicare that bundles Parts A and B, usually with Part D, and often adds benefits such as dental and vision. Networks and prior authorization usually apply.
- Medicare Assignment
- An agreement by a provider to accept the Medicare-approved amount as full payment. Providers who accept assignment cannot charge excess charges.
- Medigap (Medicare Supplement Insurance)
- Private insurance, sold in standardized plans lettered A through N, that helps pay Original Medicare cost-sharing such as deductibles, coinsurance, and copayments.
- Medigap Open Enrollment Period
- A one-time, six-month window that begins the month you are both 65 or older and enrolled in Part B, during which you can buy any Medigap plan sold in your state without medical underwriting.
O
- Original Medicare
- The federal program made up of Part A (hospital insurance) and Part B (medical insurance), available from any provider that accepts Medicare.
- Out-of-Pocket Cap (Part D)
- The yearly limit on what you pay for covered Part D drugs. It is $2,100 in 2026, after which your plan pays 100% of covered drug costs for the rest of the year.
P
- Part A
- Medicare hospital insurance. It covers inpatient hospital stays, skilled nursing facility care, hospice, and some home health care.
- Part B
- Medicare medical insurance. It covers doctor visits, outpatient care, preventive services, and durable medical equipment. The standard 2026 premium is $202.90 per month.
- Part D
- Medicare prescription drug coverage, offered through private plans either on its own or as part of a Medicare Advantage plan.
- Personal Emergency Response System (PERS)
- A medical alert system, usually a wearable button, that connects you to a monitoring center. Original Medicare does not cover it.
- The amount you pay each month to keep coverage, separate from deductibles and copayments.
- A requirement that your plan approve a service or medication before it will pay. It is more common in Medicare Advantage than in Original Medicare.
S
- Skilled Nursing Facility Coinsurance
- The daily amount you pay for days 21 through 100 of a covered skilled nursing facility stay under Part A, which is $217 per day in 2026.
- Special Enrollment Period (SEP)
- A window outside the normal enrollment periods, triggered by an event such as moving or losing employer coverage, when you can make specific Medicare changes.
- State Health Insurance Assistance Program (SHIP)
- A free, federally funded counseling service in each state that helps people understand their Medicare options. Counselors do not sell insurance.
Keep Learning
- Medicare eligibility guide
- Medicare Supplement plans A through N
- Medicare Advantage vs Medigap
- Medigap rules by state
- How to choose a medical alert system
Medical Information Disclaimer
This site provides general information about Medicare Supplement insurance and medical alert devices. It is not affiliated with or endorsed by the Centers for Medicare & Medicaid Services (CMS) or any government agency. This is not medical or insurance advice. Always consult a licensed insurance professional for personalized guidance.
Medicare rules, premiums, and plan availability change annually. Always verify current information with Medicare.gov, your State Insurance Department, or a licensed insurance advisor. For free, unbiased help, contact your State Health Insurance Assistance Program (SHIP) at shiphelp.org.
Sources
- CMS. 2026 Medicare Parts A & B Premiums and Deductibles. cms.gov.
- Medicare.gov. Medicare glossary. medicare.gov/glossary.