Health Insurance & Medicare Glossary

Your deductible is the amount you pay out of pocket for covered services before your insurance starts sharing the cost. A $2,000 deductible means you generally pay the first $2,000 of covered care yourself each plan year.

A copay is a fixed dollar amount you pay for a specific service, such as $30 for a primary care visit, regardless of the total cost of that visit.

Coinsurance is your share of costs after you’ve met your deductible, expressed as a percentage. With 20% coinsurance, you pay 20% of the covered cost and your plan pays the remaining 80%.

This is the most you’ll pay for covered services in a plan year. Once you hit this limit through deductibles, copays, and coinsurance, your plan pays 100% of covered costs for the rest of the year.

HMO plans generally require you to use in-network doctors and get referrals to see specialists, usually at a lower cost. PPO plans offer more flexibility to see out-of-network providers and specialists without a referral, typically at a higher premium.

A formulary is the list of prescription drugs a health or Medicare Part D plan covers, organized into cost tiers. The same medication can cost very differently depending on which tier a plan places it in.

A Special Enrollment Period lets you enroll in or change ACA coverage outside Open Enrollment after a qualifying life event, such as losing other coverage, getting married, having a baby, or moving.

A premium tax credit, also called a subsidy, is a government discount that lowers your monthly ACA Marketplace premium based on your household income and size. Many Arizona residents qualify without realizing it.

The Marketplace (also called the Exchange) is where individuals and families shop for and enroll in ACA-compliant health plans, and where premium tax credits are applied.

A Medicare Supplement (Medigap) plan is sold by private insurers to help pay costs Original Medicare doesn’t cover, such as coinsurance, copays, and deductibles. Medigap plans let you see any provider that accepts Medicare and don’t include a network.

Plan G is one of the most popular Medigap plans. It covers nearly all out-of-pocket costs under Original Medicare except the annual Part B deductible, which you pay yourself before Plan G coverage applies.

Plan N offers similar coverage to Plan G at a lower premium, but you pay small copays (up to $20 for some office visits, up to $50 for ER visits that don’t result in admission) and are responsible for any Part B excess charges.

Plan F offers the most complete Medigap coverage, including the Part B deductible. It’s only available to people who became eligible for Medicare before January 1, 2020; if you qualified after that date, Plan F isn’t an option.

Medicare Advantage is an alternative to Original Medicare offered by private insurers, bundling Part A and Part B (and usually Part D) into one plan, often with extra benefits like dental or vision and a built-in out-of-pocket maximum, but typically within a provider network.

Part D is optional prescription drug coverage sold by private insurers. It can be added to Original Medicare or bundled into a Medicare Advantage plan, and each plan has its own formulary and pricing tiers.

The Medicare Annual Enrollment Period runs October 15 through December 7 each year, when you can switch Medicare Advantage or Part D plans for the following year. There’s also a Medicare Advantage Open Enrollment Period from January 1 to March 31 for one additional plan change.