Medicare terms

Learn more about Medicare. Start with these definitions.


patient protection and affordable care act (PPACA)

The Patient Protection and Affordable Care Act (PPACA) – also known as the Affordable Care Act (ACA) – is the landmark health reform legislation signed into law by President Barack Obama in 2010. Key provisions extended coverage to millions of uninsured Americans, implemented measures to lower health care costs and improve system efficiency, and eliminated insurance industry practices that included rescission and denial of coverage due to pre-existing conditions.

The bulk of the ACA’s insurance provisions applied to the individual market and small group market, but the law also imposed some new regulations on the large group market, and on large employers. And some provisions directly affected Medicare.

Like the implementation of Medicare in 1965, the Affordable Care Act represented a major shift in US health care regulation. Learn about the similarities (and differences) between LBJ’s landmark Medicare legislation and the ACA.

The ACA imposed funding cuts on Medicare Advantage plans, to bring federal spending on those plans into line with what the government would spend if those enrollees were in Original Medicare instead. There was speculation that Medicare Advantage enrollment would drop as a result, but enrollment had been steadily increasing every year since 2004, and that trend continued after the ACA was enacted.

For seniors who have Medicare Part D prescription coverage, the ACA included a provision to close the donut hole by 2020, so seniors have been seeing increasingly large discounts on medications purchased while in the donut hole.

Before the ACA was implemented, seniors who were recent immigrants — and thus not eligible to purchase Medicare — had few options for health insurance coverage. But the ACA made it possible for recent immigrants over the age of 64 to purchase individual market coverage, with premium subsidies based on income.


pre-existing condition

A pre-existing condition is a medical condition that is excluded from coverage by an insurance company because the condition was believed to exist prior to the individual obtaining coverage.

preferred provider organization

A preferred provider organization (PPO) is a Medicare Advantage plan which gives policy holders an incentive use the providers (doctors, hospitals) within the plan’s network of service providers. In return, the plan pays a higher percentage of your health care expenses.

prescription drug coverage

Prescription drug coverage – or Medicare Part D – subsidizes the costs of brand-name and generic prescription drugs for Medicare beneficiaries. Medicare recipients choose the coverage by enrolling in either a stand-alone prescription drug plan (PDP) – which covers only prescription drugs – or a Medicare Advantage plan, which covers prescriptions and other medical expenses.

Regardless of the plan, you’ll pay a co-pay for each prescription, a monthly premium – which will vary by plan – and an annual deductible. Individuals with limited income and resources may qualify for financial assistance.

prescription drug plan (PDP)

A prescription drug plan (PDP) is one option for individuals who want to enroll in the Medicare Part D prescription drug coverage, which subsidizes the costs of prescription drugs for enrollees. A prescription drug plan (PDP) is a stand-alone plan, covering only prescription drugs. Enrollees who choose the option of prescription drug coverage through a Medicare Advantage plan would also have coverage for other medical expenses as part of that plan.

Enrollees pay a co-pay for each prescription, a monthly premium and an annual deductible.

preventive services

Preventive services are provided to help you avoid becoming sick in the first place. Mammograms, flu shots, Pap tests and pelvic exams are examples of preventive services.

primary care doctor

Your primary care doctor is the physician you turn to first regarding any health care issue that may arise. If you need a specialist, you trust your primary care doctor to give you the best referral for that extra care.

private fee-for-service plan

Private fee-for-service plans are Medicare Advantage plans that allow you to receive care from any hospital or doctor that accepts the plan’s coverage. The plan does not have to follow Medicare guidelines, though, when it comes to paying for the services you receive. (It can cost more or less than Medicare). However, these plans often offer more coverage than Original Medicare.  Private fee-for-service plans sometimes include prescription drug coverage, but if they don’t, you’re allowed to purchase a stand-alone prescription drug plan (that’s not the case with other Medicare Advantage plans).

programs of all-inclusive care for the elderly

Older adults and people over age 55 with disabilities may be eligible for programs of all-inclusive care for the elderly (PACE) – comprehensive care and services from a team of health care professionals using Medicare and Medicaid funds. PACE enrollees must be at least 55, live in the PACE service area, be certified as eligible by the state agency, and be healthy enough to live safely in the community.