Medicare Glossary
Translate Medicare terms into plain language without losing their practical meaning.
Premium, deductible and coinsurance
A premium is the recurring charge to keep coverage. A deductible is the amount you pay toward covered services before a benefit begins paying under its rules. Coinsurance is a percentage of the allowed cost; a copayment is a stated amount. Different Medicare parts and private policies may each have separate charges.
Official source: Medicare & You 2027, Medigap section (2026 chart) ↗ · Medicare: Current costs ↗
Formulary, network and prior authorization
A formulary is a drug plan’s covered-drug list, with tiers and use rules. A provider network lists clinicians and facilities contracted with a particular plan. Prior authorization is a plan’s approval requirement for specified care or drugs; a covered benefit can still have conditions.
Official source: Medicare: What drug plans cover ↗ · Medicare: Drug plan rules ↗ · Medicare: Provider network fact sheet ↗
Creditable coverage and IRMAA
Creditable drug coverage is expected to pay, on average, at least as much as standard Medicare drug coverage and can protect against a Part D late-enrollment penalty. IRMAA is a Social Security-determined income-related addition to Part B and Part D monthly costs.
Official source: Medicare: Creditable drug coverage ↗ · SSA: Request lower IRMAA ↗
Medigap and MA-PD
Medigap is a private policy that supplements Original Medicare cost sharing. An MA-PD is a Medicare Advantage plan that includes Medicare prescription drug coverage. They operate through different coverage structures and should not be added together as if one supplements the other.
Official source: Medicare: How Medigap works ↗ · Medicare: Original versus Advantage ↗