U.S. citizens and legal residents 65 and older are eligible for Medicare. People younger than 65 who receive Social Security Disability Insurance, or those with end-stage renal disease or ALS, also qualify. Whether you're new to Medicare or have been through the process before, it's helpful to review some of the terminology you will encounter when you enroll.
Medicare-specific terms
Medicare Part A: Helps cover hospitalization, home health care, hospice care and skilled nursing home care. This coverage is typically provided without cost to people who have paid Medicare taxes in the United States for at least 10 years.
Medicare Part B: Helps cover routine medical visits, outpatient care, X-rays and laboratory services. There is a monthly premium for this coverage.
Medicare Part D: A voluntary plan to help cover prescription drug costs.
Original Medicare: Comprises Part A (hospital insurance) and Part B (medical insurance).
Medicare supplement insurance (also called Medigap): Because Original Medicare only covers about 80% of health care costs, many consumers opt for supplemental insurance plans, sold by private carriers, to cover the other 20%.
Medicare Advantage: An insurance plan offered by private carriers that contracts with Medicare to bundle Parts A, B and D, as well as other services, such as vision and dental coverage.
General health insurance terms
HMO: Health Maintenance Organization. With this plan, you pick a primary care physician through whom all your health care services go. Visits to doctors outside the HMO network typically aren’t covered by these plans.
PPO: Preferred Provider Organization. More flexible than HMOs, PPO plans don’t require a primary care doctor and cover access to doctors both in and out of network, though staying in network generally means lower costs.
Network: The set of providers — physicians, specialists, clinics and hospitals — affiliated with your insurance plan.
Premium: The monthly fee charged for coverage by Medicare or your insurance provider.
Deductible: The amount you must pay for medical services during the calendar year before the insurance company pays.
