Key insurance terms that start with "M"

A health insurance plan offered in multiple states that meets ACA standards. Multistate plans are available on the health insurance marketplace and offer consistent benefits and pricing across different states. They provide an option for people who travel or move frequently.

Modified Adjusted Gross Income (MAGI) is the income figure used by the federal government to determine your eligibility for ACA Marketplace subsidies and Medicaid. It starts with your Adjusted Gross Income (AGI) from your tax return and adds back certain deductions.

MAGI includes:

• Wages, salaries, and tips
• Self-employment income
• Investment income (dividends, capital gains, rental income)
• Unemployment compensation
• Social Security benefits (in some cases)
• Tax-exempt interest income
• Foreign income excluded from your return

MAGI does not include child support received, gifts, or inheritances.

Why it matters for health insurance: your MAGI relative to the Federal Poverty Level (FPL) determines whether you qualify for a Premium Tax Credit, Cost-Sharing Reductions, or Medicaid. Reducing MAGI through pre-tax contributions — like maxing your 401(k), HSA, or traditional IRA — can move you into a more favorable subsidy tier or keep you below the subsidy cliff.

Minimum value is a standard used to evaluate whether an employer-sponsored health plan provides sufficient coverage to disqualify an employee from receiving Premium Tax Credits on the ACA Marketplace. A plan meets minimum value if it’s designed to pay at least 60% of the total cost of benefits for a standard population — the same actuarial threshold as a Bronze plan.

Under ACA rules, if your employer offers a plan that meets both minimum value AND the affordability standard, you generally cannot receive a Premium Tax Credit on the Marketplace — even if a Marketplace plan might cost less after subsidies.

If the employer plan fails the minimum value test (pays less than 60% of average costs), you may be eligible for Marketplace subsidies regardless of the plan’s premium cost.

How minimum value is assessed:

• Employers use an IRS-approved actuarial calculator or a safe harbor method to certify their plan meets the 60% threshold
• The plan must cover substantial inpatient hospital services and physician services to qualify
• Employers with 50+ full-time equivalent employees must offer MV-compliant plans or risk penalties under the ACA employer mandate

Minimum essential coverage (MEC) is the federal standard for health insurance that counts as real coverage under the ACA. Having MEC protects you from the individual mandate penalty in states that still have one and ensures you’re covered by a plan that meets baseline federal standards.

Coverage types that qualify as minimum essential coverage:

• ACA Marketplace plans (all metal tiers, including Catastrophic)
• Employer-sponsored group health plans
• Medicare (Parts A, B, C)
• Medicaid
• CHIP
• TRICARE and VA coverage
• Peace Corps volunteer coverage

Coverage types that do NOT qualify:

• Short-term health insurance
• Fixed indemnity or limited benefit plans
• Dental-only or vision-only plans
• Health care sharing ministry memberships
• Discount health cards

There is no longer a federal tax penalty for lacking MEC since the penalty was eliminated in 2019. However, several states (California, Massachusetts, New Jersey, Rhode Island, Vermont, and D.C.) have their own mandates with state-level penalties for residents who go without qualifying coverage.

Metal tiers are the four plan categories on the ACA Marketplace — Bronze, Silver, Gold, and Platinum. The tier tells you how costs are split between you and your insurance company on average across a large group of enrollees. It does not reflect how much your individual care will cost.

Each tier is defined by its actuarial value: the percentage of average health care costs the plan covers. You cover the rest through deductibles, copays, and coinsurance.

A higher metal tier means lower out-of-pocket costs when you use care, but a higher monthly premium. The right tier depends on how much care you expect to use and whether you qualify for Cost-Sharing Reductions (CSR) — which are only available on Silver plans.

Catastrophic plans exist as a fifth category for people under 30 or those with a hardship exemption, but they are not part of the metal tier system.

Mental health parity is the legal requirement that health insurance plans cover mental health and substance use disorder (SUD) services at the same level as physical health services. The Mental Health Parity and Addiction Equity Act (MHPAEA) prohibits insurers from applying more restrictive coverage limits to mental health care than they do to comparable medical or surgical care.

In practice, parity means:

• Your copay for a therapy session cannot be higher than your copay for a primary care visit if the plans’ benefit designs are otherwise comparable
• Prior authorization requirements for mental health services cannot be more burdensome than for medical services
• Annual or lifetime visit limits cannot apply to mental health if they don’t apply to physical health services
• Out-of-network reimbursement rates must be comparable

All ACA Marketplace plans, Medicaid expansion plans, and most employer-sponsored plans must comply with mental health parity rules. Mental health and substance use disorder services are also one of the 10 Essential Health Benefits required on all ACA-compliant plans.

The prescription drug coverage part of Medicare. Medicare Part D covers prescription medications for Medicare beneficiaries. You can add Part D coverage when you first enroll in Medicare or during the annual enrollment period. If you don't enroll when eligible, you may face a late enrollment penalty.

A private alternative to original Medicare (Parts A and B) offered by insurance companies. Medicare Advantage plans often include prescription drug coverage and additional benefits. They typically have lower premiums but more restrictions on which providers you can use.

Medicare is the federal health insurance program primarily for people 65 and older, as well as certain younger individuals with disabilities or End-Stage Renal Disease. Unlike Medicaid, Medicare eligibility is based on age or disability status — not income.

Medicare is divided into four parts:

• Part A (Hospital Insurance): Covers inpatient hospital stays, skilled nursing facility care, hospice, and some home health care. Most people pay no premium for Part A if they or their spouse paid Medicare taxes for at least 10 years.
• Part B (Medical Insurance): Covers outpatient care, doctor visits, preventive services, and durable medical equipment. Part B has a monthly premium (standard $185/month in 2026, income-adjusted for higher earners).
• Part C (Medicare Advantage): An alternative to traditional Medicare offered through private insurers. Bundles Parts A and B (and usually Part D) into a single plan, often with additional benefits like dental and vision.
• Part D (Prescription Drug Coverage): Covers prescription medications. Available as a standalone plan with traditional Medicare or bundled into a Medicare Advantage plan.

If you’re enrolled in Medicare, you are generally not eligible for Marketplace plans or Premium Tax Credits.

Medically necessary refers to health care services, treatments, or supplies that a licensed provider determines are required to diagnose, treat, or manage a medical condition — and that meet accepted standards of medical practice. Insurers use this standard to decide whether to cover and pay for a service.

For a service to be considered medically necessary, it generally must be:

• Appropriate for the diagnosis or treatment of the condition
• Consistent with nationally recognized clinical guidelines
• Not primarily for the convenience of the patient or provider
• The most cost-effective option that can address the condition

Insurers can deny claims by determining a service was not medically necessary — even if your doctor ordered it. This is one of the most common reasons for claim denials. If you receive a denial on these grounds, your doctor can submit additional clinical documentation to support the medical necessity of the service as part of an appeal.

Cosmetic procedures, experimental treatments, and services not backed by clinical evidence are typically excluded from medical necessity determinations and are not covered by most health plans.

The process an insurance company uses to evaluate your health and medical history to determine if it will offer you coverage and at what price. Medical underwriting was used to deny coverage or charge higher premiums based on pre-existing conditions before the Affordable Care Act prohibited this practice in the health insurance marketplace.

Medicaid expansion refers to the ACA’s provision that allowed states to extend Medicaid eligibility to nearly all adults with incomes up to 138% of the Federal Poverty Level (FPL). Before the ACA, Medicaid had much stricter eligibility rules that left many low-income adults — particularly those without children — without coverage options.

The Supreme Court ruled in 2012 that Medicaid expansion must be optional for states. As of 2026, 40 states and D.C. have adopted expansion. The 10 non-expansion states (including Florida, Texas, Georgia, and others) maintain more restrictive Medicaid eligibility, leaving a significant coverage gap for residents whose incomes fall below the federal poverty line.

In expansion states:

• Adults earning up to 138% FPL (~$20,783/year for an individual in 2026) generally qualify for Medicaid
• The federal government covers 90% of the cost of newly eligible enrollees

In non-expansion states like Florida:

• Adults without dependent children have very limited Medicaid eligibility regardless of income
• Residents earning between 100% and 138% FPL can access Marketplace plans with Premium Tax Credits
• Residents below 100% FPL face a coverage gap with no Medicaid and no subsidy eligibility

Medicaid is a joint federal-state program that provides free or very low-cost health insurance to people with low incomes, including families with children, pregnant women, older adults, and people with disabilities. Unlike Marketplace plans, Medicaid has no monthly premium in most states, and cost-sharing is minimal or nonexistent.

Eligibility is based primarily on income as a percentage of the Federal Poverty Level (FPL). Since the ACA’s Medicaid expansion (adopted by most states), adults earning up to 138% FPL generally qualify in expansion states. Non-expansion states have more restrictive eligibility rules.

Medicaid accepts applications year-round — there is no Open Enrollment Period. If you qualify, you can enroll at any time through your state’s Medicaid office or through HealthCare.gov.

Florida has not expanded Medicaid. Florida residents earning between 100% and 138% FPL do not qualify for Medicaid but can access Marketplace plans with Premium Tax Credits. Residents below 100% FPL face a coverage gap in Florida unless they meet other eligibility criteria (children, pregnant, disabled, or caretaker of a dependent child).

A managed care plan is a type of health insurance that coordinates your care through a network of providers and uses cost-control mechanisms to manage how and when you access health services. Most modern health insurance plans — including HMOs, PPOs, EPOs, and POS plans — are forms of managed care.

Managed care plans typically use some combination of these tools to control costs:

• Provider networks: Negotiated rates with specific doctors and hospitals; in-network care costs significantly less
• Primary care coordination: A designated PCP manages your overall care and referrals (HMOs and POS plans)
• Prior authorization: Insurer approval required before certain procedures, medications, or specialist visits
• Utilization review: The insurer evaluates whether care is medically necessary and appropriate
• Care management programs: Support programs for chronic conditions (diabetes, asthma, heart disease)

The alternative to managed care is a traditional indemnity (fee-for-service) plan, where you can see any provider and your insurer pays a set share of the bill. These are now rare on the individual market.