Medicare: Terms to Know

Medicare is a complicated government benefits program that uses a lot of terms you may not be familiar with. If you’re covered by this program, the following glossary can help you understand some of the basic terms that describe your benefits.

Any willing doctor

A doctor, hospital, or other health care provider who agrees to accept the plan’s terms and conditions related to payment, and who meets other requirements for coverage.

Coinsurance

The amount you may be required to pay for services after you pay any plan deductibles. In the Original Medicare Plan, this is a percentage (such as 20 percent) of the Medicare-approved amount. You have to pay this amount after you pay the deductible for Part A and/or Part B. In a Medicare Prescription Drug Plan, the coinsurance will vary depending on how much you have spent.

Custodial care

Nonskilled personal care, such as help with activities of daily living like bathing, dressing, eating, getting in or out of a bed or chair, moving around, and using the bathroom. It also may include care that most people do themselves, such as using eye drops. In most cases, Medicare doesn’t pay for custodial care.

Excess charges

If you’re in the Original Medicare Plan, this is the difference between a doctor’s or other health care provider’s actual charge and the Medicare-approved payment amount.

Formulary

A list of drugs covered by a plan.

Medically necessary

Services or supplies that are needed for the diagnosis or treatment of your medical condition, meet the standards of good medical practice, and aren’t mainly for the convenience of you or your doctor.

Medicare-approved amount

In the Original Medicare Plan, this is the amount a doctor or supplier can be paid, including what Medicare pays and any deductible, coinsurance, or copayment you pay. It may be less than the actual amount charged by a doctor or supplier.

For more information, visit the Medicare Web site at http://www.medicare.gov.