Medicare Terminology Cheatsheet

Navigating Medicare can feel complex with all the different terms and options available, but understanding the key components can make it much easier. Medicare is divided into several parts, each providing specific types of coverage—Part A for hospital care, Part B for medical services, Part C (Medicare Advantage) as an all-in-one alternative, and Part D for prescription drug coverage. In addition to these parts, knowing the enrollment periods, payment structures like premiums and deductibles, and supplemental options such as Medigap can help you manage your healthcare effectively. This cheat sheet simplifies the essential terminology you need to know for a smoother Medicare experience.

Click here to download a printable cheatsheet of the information below.

Medicare Terminology Cheatsheet

Medicare Parts

• Part A (Hospital Insurance)
• Covers inpatient hospital stays, skilled nursing facility care, hospice care, and some home health care.
• Part B (Medical Insurance)
• Covers outpatient care, preventive services, medical supplies, and some doctor's services.
• Part C (Medicare Advantage)
• An alternative to Original Medicare offered by private companies approved by Medicare.
• Part D (Prescription Drug Coverage)
• Helps cover the cost of prescription drugs.
• Original Medicare
• Consists of Part A and Part B, provided by the federal government.

Enrollment Periods

• Annual Election Period (AEP) or Open Enrollment Period
• A period from October 15 - December 7 each year to make changes to existing coverage.
• Initial Enrollment Period (IEP)
• A 7-month period around your 65th birthday when you can first sign up for Medicare.
• General Enrollment Period (GEP)
• January 1 - March 31 each year for those who missed their IEP.
• Special Enrollment Period (SEP)
• Time outside normal enrollment periods when you can sign up or change plans due to certain life events.
• Medicare Advantage Open Enrollment Period
• From January 1 to March 31 each year, if you already have a Medicare Advantage plan, you can switch to a different Medicare Advantage plan or switch back to Original Medicare (Part A and Part B).

Costs and Payments

• Premium
• Monthly payment for Medicare coverage.
• Deductible
• Amount you pay for covered health care services before Medicare begins to pay.
• Copayment/Coinsurance
• Your share of the costs of a covered health care service, usually a fixed amount (copayment) or a percentage (coinsurance).

Supplemental & Additional Terms

• Medigap (Medicare Supplement Insurance)
• Private insurance that can help pay for some of the health care costs Original Medicare doesn't cover.
• Medically Necessary
• Services or supplies needed for the diagnosis or treatment of your medical condition that meet accepted standards of medical practice.
• Catastrophic Coverage
• Phase of Part D coverage when you only pay a small coinsurance or copayment for covered drugs for the rest of the year.
• Network
• The facilities, providers, and suppliers your health insurer or plan has contracted with to provide health care services.
• Prior Authorization
• Approval from a health plan that may be required before you get a service or fill a prescription to ensure the service is medically necessary.

Prescription Drug Coverage

• Formulary
• A list of prescription drugs covered by a Medicare Part D plan.
• Coverage Gap (Donut Hole)
• A temporary limit on what the drug plan will cover for drugs. After spending a certain amount, you pay more for prescriptions until you reach the catastrophic coverage threshold.
• Creditable Prescription Drug Coverage
• Drug coverage that's expected to pay, on average, at least as much as Medicare's standard prescription drug coverage.