Annual Enrollment Period (AEP)
The time each year (October 15 – December 7) when you can make changes to your Medicare coverage for the following year. You can switch Medicare Advantage plans, join or drop a Part D drug plan, or switch between Original Medicare and Medicare Advantage.
Benefit Period
Begins the day you’re admitted to a hospital and ends when you haven’t received inpatient hospital or skilled nursing care for 60 consecutive days. Medicare Part A costs (deductible, coinsurance) reset with each new benefit period.
Coinsurance
Your share of costs for a covered service, calculated as a percentage. For example, Medicare Part B coinsurance is typically 20% — meaning Medicare pays 80% and you pay 20% after meeting your deductible.
Copay (Copayment)
A fixed dollar amount you pay for a covered service. For example, you might pay a $20 copay for a doctor visit or a $10 copay for a generic prescription.
Creditable Coverage
Health insurance coverage (like employer coverage) that is expected to pay, on average, at least as much as Medicare’s standard prescription drug coverage. If your coverage is creditable, you won’t face a late enrollment penalty when you eventually join Part D.
Deductible
The amount you pay out of pocket for covered services before your insurance begins to pay. In 2026, the Medicare Part B deductible is $283 per year. The Part A deductible is $1,736 per benefit period.
Donut Hole (Coverage Gap)
Previously a gap in Part D drug coverage where you paid more for prescriptions. The Inflation Reduction Act effectively eliminated this gap — Part D now has a $2,100 annual out-of-pocket cap for 2026, after which you pay $0 for covered drugs.
Dual-Eligible
A person who qualifies for both Medicare and Medicaid. In Ohio, dual-eligible individuals may be enrolled in the MyCare program, which combines both programs into one managed care plan.
Extra Help (Low-Income Subsidy / LIS)
A Medicare program that helps people with limited income and resources pay for Part D prescription drug costs, including premiums, deductibles, and copays.
Formulary
A list of prescription drugs covered by a Medicare drug plan or Medicare Advantage plan. Each plan has its own formulary, and drugs are organized into cost tiers. Your out-of-pocket cost depends on which tier your medication is on.
General Enrollment Period (GEP)
January 1 – March 31 each year. If you missed your Initial Enrollment Period for Part A or Part B, you can sign up during this window. Coverage begins the month after you enroll.
Guaranteed Issue Rights
Rights that protect you in certain situations where an insurance company must sell you a Medigap policy, must cover your pre-existing conditions, and cannot charge you more due to health problems.
Initial Enrollment Period (IEP)
The 7-month window to sign up for Medicare when you first become eligible. It begins 3 months before you turn 65, includes your birthday month, and ends 3 months after.
IRMAA (Income-Related Monthly Adjustment Amount)
A surcharge added to your Part B and Part D premiums if your income exceeds certain thresholds. Based on your tax return from two years prior. In 2026, the standard Part B premium is $202.90 — IRMAA can increase it to as much as $689.90 per month.
Late Enrollment Penalty
A permanent increase to your monthly premium if you delay enrolling in Medicare when first eligible. The Part B penalty is 10% for each full 12-month period you could have had Part B but didn’t. The Part D penalty is 1% of the national base premium ($38.99 in 2026) for each month you went without creditable coverage.
Medicaid
A joint federal and state program that helps people with limited income and resources pay for healthcare. In Ohio, Medicaid is administered by the Ohio Department of Medicaid.
Medicare Advantage (Part C)
A type of Medicare plan offered by private insurance companies that contracts with Medicare. These plans bundle Part A (hospital) and Part B (medical) coverage, and usually include Part D (drug) coverage. Many offer extra benefits like dental, vision, and hearing.
Medicare Part A (Hospital Insurance)
Covers inpatient hospital stays, skilled nursing facility care, hospice care, and some home health care. Most people don’t pay a premium for Part A if they or their spouse paid Medicare taxes for at least 10 years (40 quarters).
Medicare Part B (Medical Insurance)
Covers doctor visits, outpatient care, preventive services, durable medical equipment, and some home health care. The standard premium is $202.90 per month in 2026.
Medicare Part D (Prescription Drug Coverage)
Covers prescription medications. Offered through private insurance companies either as a standalone plan (with Original Medicare) or as part of a Medicare Advantage plan. The 2026 out-of-pocket cap is $2,100.
Medicare Savings Programs (MSPs)
State programs that help pay some or all of your Medicare premiums and may also pay deductibles, coinsurance, and copays. Programs include QMB, SLMB, and QI.
Medicare Supplement (Medigap)
Private insurance policies that help pay for costs that Original Medicare doesn’t cover, like copays, coinsurance, and deductibles. Plans are standardized by letter (A, B, C, D, F, G, K, L, M, N). Plans C and F are not available to people who became eligible for Medicare after January 1, 2020.
MSP (Medicare Savings Program)
See Medicare Savings Programs above. These state-run programs help cover Medicare costs for people with limited income and resources.
Network
The group of doctors, hospitals, pharmacies, and other healthcare providers that have contracted with a health plan to provide services. In HMO plans, you typically must use in-network providers. PPO plans allow out-of-network care at higher cost.
Open Enrollment Period (OEP)
January 1 – March 31 each year. During this period, people already in Medicare Advantage can switch to a different MA plan or drop MA and return to Original Medicare with a Part D plan.
Out-of-Pocket Maximum
The most you pay for covered services in a plan year. After you reach this amount, the plan pays 100% for covered services. Medicare Advantage plans have a federally set maximum of $9,250 in-network for 2026. Original Medicare has no out-of-pocket maximum (which is why many people add a Medigap policy).
Premium
The amount you pay each month for your Medicare coverage. In 2026, the standard Part B premium is $202.90. Part D and Medicare Advantage premiums vary by plan. Many Medicare Advantage plans have $0 monthly premiums.
Prior Authorization
Approval from your plan before you receive certain services or medications. Your doctor or provider must show the service is medically necessary. Without prior authorization, the plan may not cover the cost.
SNP (Special Needs Plan)
A type of Medicare Advantage plan designed for people with specific diseases or characteristics. Types include D-SNP (dual-eligible), C-SNP (chronic conditions), and I-SNP (institutional).
Special Enrollment Period (SEP)
A time outside the regular enrollment periods when you can sign up for or change your Medicare coverage due to specific life events — such as losing employer coverage, moving out of your plan’s service area, or qualifying for Extra Help/Medicaid.
Star Rating
Medicare’s quality rating system for health and drug plans, on a scale of 1 to 5 stars. Plans with higher star ratings generally provide better care and service. Five-star plans offer a special enrollment period year-round.
Step Therapy
A requirement by some drug plans that you try a lower-cost medication before the plan will cover a more expensive one. For example, you may need to try a generic drug before the plan will approve a brand-name alternative.