Welcome to the Blue Cross Blue Shield of Massachusetts Medicare glossary. Here, you’ll find easy-to-understand descriptions of common Medicare terms.
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Behavioral health includes mental health care, like visits with a psychiatrist or psychologist, as well as care for substance use disorders. It focuses on how behaviors affect both your health and overall well-being.
Coverage that makes sure your prescription drug costs don’t become unmanageable. Starting in 2024, once you move out of the coverage gap, your insurance provider covers your prescription costs for covered Part D drugs.
With a co-insurance, you pay some of the cost of your care, and Medicare will pay the rest. For example, a 10% co-insurance on a $100 procedure would be $10. You pay a co-insurance after you’ve paid your plan deductible.
Copayment (or Copay)
A set dollar amount you pay for each health care service, like a doctor's visit or prescription filled.
Coverage Gap (The Donut Hole)
The Part D coverage gap is the area between the maximum prescription drug benefit limit your plan offers and the maximum out-of-pocket costs you must meet before catastrophic coverage kicks in. Don’t worry if you fall into the Part D donut hole. Your drug prices will be capped at 25% of the total cost of both brand-name and generic drugs.
This is a set amount you’ll have to pay out-of-pocket for health care or prescriptions before your coverage begins. With Original Medicare, your deductible is either based on a benefit period (that is, each new time you go to the hospital) for Part A or yearly for Parts B and D. Your deductibles can change yearly.
See coverage gap.
This is your decision about the plan you want to join. Whether you enroll in Original Medicare, a Medicare Advantage plan or a Prescription Drug Plan, that is your election.
A formulary is the list of covered medications under a Medicare Advantage or a Prescription Drug Plan (Part D). This list includes both brand-name and generic drugs. In some Medicare health plans, doctors must only use medications listed on the health plan's formulary.
HMO (Health Maintenance Organization)
A type of Medicare managed care plan where a group of doctors, hospitals and other health care providers agree to give health care to beneficiaries for a set amount of money from the Federal government every month. Usually, you’ll need to get your care from the providers in the plan.
Hospice care is designed for those who are terminally ill and can include physical care and counseling. Hospice care is covered under Medicare Part A.
Health care that you get when you're admitted to a hospital.
Most health insurances have a list of pre-approved providers that you can visit. You will pay a lower, in-network copay when you visit these providers.
Inpatient refers to care that requires you to be admitted to the hospital and spend at least one night. Surgery, overnight observation or a traumatic injury would all be inpatient care.
Late Enrollment Penalty
An amount added to your monthly premium for Medicare Part B or a Medicare Prescription Drug Plan if you don't join when you're first able to. You pay this higher amount as long as you have Medicare. You can delay enrolling in both these plans and avoid the penalty if you already have health coverage through another source, such as an employer.
A Medicare supplement (Medigap) policy (see definition below), offered by Blue Cross Blue Shield of Massachusetts.
Medicare Advantage Plan (Part C)
These private health plans are an alternative to Original Medicare. They can be a Medicare-managed care plan (HMO or PPO) or private fee-for-service (PFFS) plans. These plans are subsidized by the federal government and cover everything Original Medicare does, plus they generally include additional benefits like dental and prescription drug coverage.
Original Medicare is made up of both Part A and Part B. Part A covers inpatient care, skilled nursing facilities, nursing home care, hospice care, and home health care. Part B covers medically necessary services, such as lab tests or medical equipment, and preventive services, such as routine doctors’ visits or vaccines.
Medicare Health Plan
This is a general term for any private insurance plan that contracts with Medicare. The most common type is Medicare Advantage plans, but the term also covers Medicare Costs plans, pilot programs and Program of All-inclusive Care for the Elderly (PACE) plans.
Medicare Prescription Drug Coverage (Part D)
Optional Medicare prescription drug coverage that helps pay for prescription medications.
Medicare Supplement Insurance (Medigap)
Medicare Supplement Insurance is private insurance that is used to cover Original Medicare’s out-of-pocket expenses like deductibles, copays, and co-insurances. A Medicare Supplement policy can only be used with Original Medicare — not with a Medicare Advantage plan or a Medigap plan.
Original Medicare (Parts A + B)
A federally funded, fee-for-service health plan that lets you go to any doctor, hospital, or other health care supplier that accepts Medicare and is accepting new Medicare patients.
If you visit a healthcare provider that isn't part of your health insurance’s approved network of providers, it’s considered out-of-network care. You may pay a higher copay for out-of-network care.
Out-of-pocket costs refer to money that comes out of your own pocket, meaning any expense you cover directly. This term is most often used for deductibles, copays, or co-insurances but can refer to almost anything related to an expense, including premiums, medical equipment, or transportation.
Medical or surgical care that doesn't include an overnight hospital stay. Examples include urgent care, minor surgery, and diagnostic tests.
PFFS (Private Fee for Service)
A type of Medicare Advantage plan that allows you to visit any Medicare-approved doctor or hospital that accepts the plan. The insurance plan, rather than the Medicare program, decides how much it will pay and what you pay for the services you get. You may get extra benefits that Original Medicare doesn't cover, but you may pay more (or less) for Medicare-covered benefits.
Point of Service (POS) plans
A health insurance plan that allows you to pay less if you use in-network doctors, hospitals, and other care services.
PPO (Preferred Provider Organization)
A type of Medicare Advantage plan in which you use doctors, hospitals, and providers that belong to the network. You can use outside network providers for an additional cost.
The periodic (generally monthly) payment to any insurance company, health care plan, or Medicare for health care.
A health condition, such as asthma or diabetes, you were diagnosed with before joining a new health insurance plan. Don’t worry: you can't be denied coverage or charged a higher rate due to a pre-existing condition.
Primary Care Provider (PCP)
A provider, usually a family or general practitioner, or internist, who provides a broad range of routine medical services and refers patients to other providers as necessary. In many Medicare-managed care plans, you’ll need to see your primary care provider before seeing any other health care provider.
Provider of Choice (POC)
A health care professional you select to coordinate your health care. Your POC is responsible for providing or authorizing covered services while you are a plan member. Refer to Chapter 3 of your Evidence of Coverage for more information about POCs.