Glossary of Elder Care Terms

Quick answers to your health insurance and elder care questions grouped by category.

Health Insurance Terms

Affordable Care Act (ACA) – The 2010 law that expanded access to health insurance, protects people with preexisting conditions, and requires most plans to cover essential health benefits.

Accident-only plan – a limited health plan that only covers care needed due to accidents. It won’t cover illness or preventive care.

Allowed amount (or eligible expense) – The maximum amount your insurer will pay for a covered service. If a provider charges more, you may owe the difference if they’re out-of-network.

Balance billing – When a provider bills you for the difference between their charge and what your insurance pays. This usually happens with out-of-network care.

Benefit period – The length of time your insurance plan covers you for services, usually one calendar year.

Catastrophic plan – a low-premium, high-deductible plan designed to protect against very high costs. Available to people under 30 or those with a hardship exemption.

Claim – A request for payment that you or your provider submit to your insurer after receiving care.

Co-insurance – Your share of the costs of a covered service, calculated as a percentage. For example, you might pay 20% of the cost of a service, and your plan pays 80%.

Coordination of benefits (COB) – If you have more than one insurance policy (like through two jobs or a spouse), this determines which pays first and how the other contributes.

Co-pay (copayment) – A fixed amount you pay for a covered service, typically at the time you receive it (e.g., $25 for a doctor visit).

Cost-sharing – Your share of costs for services—includes co-pays, deductibles, and co-insurance.

Coverage area – The geographic region where your plan covers care. This can affect which providers you’re allowed to see and whether emergencies are covered when traveling.

Deductible – The amount you pay for covered health care services before your insurance starts to pay.

EPO (Exclusive Provider Organization) – A type of plan that usually doesn’t cover any out-of-network care except emergencies. Lower premiums, but fewer provider choices.

Essential health benefits – Ten categories of care (like maternity, mental health, and prescription drugs) that most insurance plans must cover under the Affordable Care Act.

Explanation of Benefits (EOB) – A statement from your insurer after a claim is processed, showing what was billed, what was covered, what they paid, and what you may owe. It’s not a bill.

Formulary – A list of prescription drugs your plan covers, often grouped into cost tiers.

Grace Period – A short period after your premium due date during which you can still pay without losing coverage (typically 30 days).

Health Reimbursement Arrangement (HRA) – An employer-funded account that reimburses you for medical expenses. Funds don’t usually roll over if you leave your job.

Health Savings Account (HSA) – A tax-advantaged account you can use to pay for qualified medical expenses. Only available with high-deductible health plans.

High-deductible health plan (HDHP) – A plan with a higher deductible and lower premium, often paired with – an HSA.

HMO (Health Maintenance Organization) – A plan that typically requires you to see doctors within its network and get a referral from your primary care provider to see specialists.

In-network vs. out-of-network – In-network providers contract with your insurance plan and usually cost less. Out-of-network providers haven’t agreed to your plan’s rates and may cost more or not be covered.

Lifetime maximum – A cap on the total amount a plan will pay over your lifetime. These limits are no longer allowed for essential health benefits under the ACA.

Marketplace – The Marketplace (also called the Health Insurance Marketplace or Exchange) is the government-run website or platform where individuals, families, and small businesses can shop for, compare, and enroll in health insurance plans. Plans are also sold from insurers.

Network – The group of doctors, hospitals, labs, and other providers that contract with your insurance company to offer discounted services.

“Obamacare” – The Affordable Care Act (ACA), a 2010 law that expanded access to health insurance, protects people with preexisting conditions, and requires most plans to cover essential health benefits.

Open enrollment – The once-a-year window when you can enroll in, renew, or change – your health insurance plan.

Outpatient care – Medical care or procedures that don’t require an overnight hospital stay (like labs, x-rays, or minor surgeries).

Out-of-pocket maximum (OOP max) – The most you’ll pay in a year for covered care. After hitting this cap, your insurer pays 100% of covered costs.

POS (Point of Service) – A plan that blends features of HMOs and PPOs. You choose a primary care doctor and need referrals, but you can go out-of-network for a higher cost.

PPO (Preferred Provider Organization) – A flexible plan that lets you see any provider, but offers lower costs for using those in the plan’s network. No referrals needed.

Preauthorization (or precertification)– Same as prior authorization—it’s a required OK from your insurer before you get certain treatments or meds.

Premium – The amount you pay—usually monthly—to keep your health insurance policy active.

Preventive care – Routine health services like screenings, check-ups, and vaccinations meant to catch problems early. Most plans cover these at no cost to you.

Primary care provider (PCP) – Your main doctor who manages your overall health and refers you to specialists as needed.

Prior authorization – Advance approval from your insurance company for certain procedures, treatments, or medications. Without it, your insurer may not pay.

Referral – An order from your primary care provider for you to see a specialist or get specific services. Often required by HMO plans.

Special enrollment period – A time outside of the standard open enrollment when you can sign up for or change your health insurance triggered by events like having a baby or losing coverage

Subsidy – Financial help (usually based on income) from the government to lower your monthly premium or out-of-pocket costs when buying insurance through the Marketplace.

Legal Terms in Healthcare 

Durable Power of Attorney (DPOA)-A type of POA that remains valid even if the person becomes incapacitated due to illness, injury, or mental decline. It is commonly used in long-term care planning and can be for both financial and healthcare matters.

Power of Attorney (POA) A general term for the legal document that allows one person (the principal) to give another person (the agent or attorney-in-fact) the authority to act on their behalf. 

Medical Power of Attorney (Healthcare POA) – A specific type of POA that gives someone authority to make healthcare decisions when the individual is no longer able to do so.  Also called a Health Care Proxy.

Advance Directive (AD) – A legal document that outlines a person’s medical treatment preferences in case they become unable to communicate. Also known as: Living Will, Healthcare Directive,Medical Directive.  It is used along with a POA.

It might include:

• Whether they want life support (ventilator, feeding tube)
• Pain management preferences
• Do Not Resuscitate (DNR) orders
• Organ donation choices

Living Will – A type of advance directive that states preferences for life-sustaining treatments (e.g., ventilators, feeding tubes, resuscitation) if you are facing a terminal illness, irreversible unconsciousness or other end-of-life condition. It applies only while you are alive but lack the capacity to communicate your wishes.

Do Not Resuscitate (DNR) Order – A medical order that tells healthcare providers not to perform CPR (cardiopulmonary resuscitation) if your heart stops or you stop breathing. A DNR only applies to resuscitation. 

POLST / MOLST

• POLST = Physician Orders for Life-Sustaining Treatment
• MOLST = Medical Orders for Life-Sustaining Treatment
  These are doctor-signed orders based on your wishes for emergency care. They are ,ore specific than an advance directive and often used by people with serious illness.

Legal Terms in Financial Matters

Trustee – A trustee manages a trust, which is a legal arrangement where one person (the trustee) holds property or assets for the benefit of another (the beneficiary)

Conservator – appointed by a court to manage the financial affairs of an adult who is no longer able to do so themselves due to incapacity. This is also called Guardian of the Estate in some states. 

Executor An executor is a type of fiduciary. the person named in a will to handle someone’s estate after they die.

Fiduciary -is a broad legal term for person or institution legally obligated to act in someone else’s best interest, especially in managing money or assets. Trustees, executors and conservators are all fiduciaries.

Guardian  – appointed by a court to make personal, medical, and sometimes residential decisions for someone who is legally incapacitated. This is different from a conservator, who handles money.

Intestate – Dying without a valid will. If this happens, the state decides how assets are distributed.

Financial POA: A specific type of POA that gives someone authority tohandle money, bills, property, and financial affairs when the individual is no longer able to do so.  

Durable Power of Attorney (DPOA)-A type of POA that remains valid even if the person becomes incapacitated due to illness, injury, or mental decline. It is commonly used in long-term care planning and can be for both financial and healthcare matters.

Probate -the court-supervised process that settles a person’s estate after they pass away.

Types of Trusts 

A trust is a legal arrangement where one person (the trustee) manages money or property for someone else’s benefit (called the beneficiary) according to rules set by the person who created the trust (the grantor).

Revocable Living Trust Revocable Living Trust

• What it is: Created by an individual (the “grantor”) during their lifetime.
• Why it’s used: To avoid probate, keep control of assets, and provide seamless management if the person becomes incapacitated.
• Flexibility: Can be changed or revoked at any time.
• Best for: General estate planning, providing a smooth transition of control.

Irrevocable Trust

• What it is: Once created, it generally cannot be modified or revoked.
• Why it’s used: Protect assets from creditors, reduce estate taxes, and sometimes qualify for Medicaid.
• Best for: Long‑term care planning and asset protection.

Medicaid Asset Protection Trust (MAPT)

What it is: A special type of irrevocable trust.

Why it’s used: Protect assets from being counted as “available” for Medicaid eligibility after a certain look‑back period.

Best for: Helping older adults qualify for long‑term care benefits while preserving a legacy for heirs.

Special Needs Trust (SNT)

• What it is: Created for an individual with a disability.
• Why it’s used: Provides supplemental support for someone with special needs without disqualifying them from government benefits.
• Best for: Elderly or adult children with disabilities, or aging adults who might require long‑term care.

Testamentary Trust

• What it is: Created upon death through a Will.
• Why it’s used: Provides structure for distributing and managing an inheritance, especially when the beneficiary may be too old, too young, or unable to manage it themselves.
• Best for: Helping older adults plan for a spouse or dependent’s long‑term care.

Qualified Income Trust (QIT) or Miller Trust

• What it is: Created to help someone qualify for Medicaid when their income is too high.
• Why it’s used: Enables the person to access long‑term care benefits despite exceeding income limits.
• Best for: Older adults in nursing homes or requiring long‑term care services.

Veterans Asset Protection Trust – An irrevocable trust designed for veteran benefits. Helps protect a veteran’s assets from being counted when applying for VA pension benefits like Aid and Attendance.

Medicare

Medicare health insurance for people 65 or older. You may be eligible to get Medicare earlier if you have a disability, End-Stage Renal Disease (ESRD), or ALS (also called Lou Gehrig’s disease).  Medicare is a BIG topic so we suggest starting here at Medicare.gov.

Medicare Part A is hospital insurance that covers inpatient care in hospitals, skilled nursing facility care, hospice care, and some home health care services. Most people don’t pay a premium for Part A if they or their spouse paid Medicare taxes while working.

Medicare Part B is medical insurance that helps cover services like doctor visits, outpatient care, preventive services, and some home health care. Part B typically requires a monthly premium and may also include a deductible and coinsurance.

Medicare Part C  also known as Medicare Advantage Plans and are an alternative to Original Medicare. These plans are offered by private companies approved by Medicare and often include Part A and Part B coverage, along with additional benefits like vision, dental, hearing, and sometimes Part D drug coverage.

Medicare Part D is prescription drug coverage provided by private insurance companies approved by Medicare. It helps pay for the cost of prescription medications and may include monthly premiums, deductibles, and copayments or coinsurance.

Medicare Advantage Plans, also known as Part C, are an alternative to Original Medicare. These plans are offered by private companies approved by Medicare and often include Part A and Part B coverage, along with additional benefits like vision, dental, hearing, and sometimes Part D drug coverage.

Medicare Supplement Plans, also called Medigap, are private insurance policies that help pay some of the out-of-pocket costs not covered by Original Medicare, such as copayments, coinsurance, and deductibles. These plans do not work with Medicare Advantage Plans and do not include prescription drug coverage.

Medigap Plans are also called Medicare Supplement Plans are private insurance policies that help pay some of the out-of-pocket costs not covered by Original Medicare, such as copayments, coinsurance, and deductibles. These plans do not work with Medicare Advantage Plans and do not include prescription drug coverage.

Donut hole (Medicare Part D) – A temporary coverage gap in Medicare prescription drug plans where you may pay more out-of-pocket for medications until reaching a spending threshold.

Income-Related Monthly Adjustment Amount (IRMAA) – Medicare uses your tax return from two years ago to determine how much you’ll pay for Part B (medical coverage) and Part D (prescription coverage). If your income was above certain thresholds, an extra charge will be added to your premium. In other words, the more you earned two years ago, the more you may pay for Parts B and D today.

Medicaid

Medicaid Spend Down– When someone has too much income or too many assets to receive Medicaid, they will use that income on medical or care-related expenses in order to “spend down” until they reach Medicaid eligibility.

Look-Back Period – Medicaid checks financial transactions made during the 5 years (60 months) prior to the application date. Gifts, transfers, or selling property below market value during this time may trigger penalties.

Penalty Period – If you violated the look-back rules, this is how long Medicaid will withhold long-term care coverage. It’s calculated by dividing the amount improperly transferred by the average monthly cost of nursing home care in your state.

Asset Limit / Resource Limit – The total countable assets you can have and still qualify. Typically $2,000 for a single person in most states, but this varies.

Countable vs. Non-Countable Assets -Not all assets “count” toward the asset limit.

• Countable: cash, stocks, vacation homes.
• Non-countable: primary home (if equity is under limit), one car, personal belongings, irrevocable funeral trusts.

Community Spouse – The healthy spouse of someone entering long-term care. They’re allowed to retain certain income and assets to prevent impoverishment, protected under spousal impoverishment rules.

Healthcare

Activities of Daily Living (ADLs) – Basic self-care tasks: bathing, dressing, eating, toileting, and mobility.

Instrumental Activities of Daily Living (IADLs) – More complex daily tasks like managing finances, transportation, medication management, cooking, and housekeeping.

Palliative Care – Medical care focused on relief from symptoms and stress of serious illness. This can be given along with curative treatments and does not have to happen at the end of life. The goal is to make life as comfortable as possible for someone with a chronic condition.

Hospice – Care for people in the final stages of terminal illness—focused entirely on comfort and not curative treatment.

Respite Care – Temporary care provided to give a break to the regular caregiver.

Long-Term Care – Umbrella term for services and support for personal care needs over an extended period; nursing homes, home health aides, and assisted living.

State Health Insurance Assistance Programs (SHIP) – Free, local, in-depth, and objective insurance counseling and assistance to Medicare-eligible individuals, their families, and caregivers.