Common Medicare Terms
- Medicare: A federal health insurance program in the United States primarily catering to individuals aged 65 and older, as well as certain younger individuals with disabilities or specific medical conditions.
- Original Medicare: Refers to the core Medicare coverage provided directly by the federal government, including Medicare Part A and Part B.
- Medicare Part A (Hospital Insurance): Covers inpatient hospital care, skilled nursing facility care, hospice care, and some home health care.
- Medicare Part B (Medical Insurance): Encompasses outpatient care, doctor visits, preventive services, and some home health services.
- Medicare Part C (Medicare Advantage): Private health plans approved by Medicare that provide coverage combining Part A, Part B, and often additional benefits such as vision, dental, and prescription drug coverage.
- Medicare Part D (Prescription Drug Coverage): A separate prescription drug coverage plan that can be added to Original Medicare, often covering outpatient prescription drugs.
- Medicare Supplement Insurance (Medigap): Private insurance policies that can be purchased to help cover costs not covered by Original Medicare, such as copayments, deductibles, and coinsurance.
- Premium: The amount paid for Medicare coverage, typically on a monthly basis.
- Deductible: The initial amount an individual must pay out of pocket before Medicare coverage begins.
- Copayment (Copay): A fixed amount paid by the beneficiary for certain covered services or medications, usually due at the time of service.
- Coinsurance: A percentage of the cost of a service or medication that the beneficiary is responsible for paying, typically after meeting the deductible.
- Open Enrollment Period: The annual period during which individuals can make changes to their Medicare coverage, such as switching plans or adding prescription drug coverage.
- Special Enrollment Period: A period outside of the regular enrollment periods during which eligible individuals can enroll in or make changes to their Medicare coverage due to certain life events.
- Out-of-Pocket Maximum/Limit: The maximum amount a beneficiary is required to pay for covered services in a given year, beyond which Medicare covers the costs.
Medicare Part D Terms:
- Formulary: The list of prescription drugs that a Medicare Part D plan covers. Formularies are categorized into tiers, each representing a different level of cost-sharing.
- Tiered Cost-Sharing: The structure of formularies in which prescription drugs are grouped into different tiers, each with a distinct copayment or coinsurance amount.
- Premium: The monthly payment required to maintain Medicare Part D prescription drug coverage.
- Deductible: The initial out-of-pocket amount that a beneficiary must pay before the prescription drug coverage begins.
- Copayment (Copay): A fixed amount paid by the beneficiary for a specific prescription drug, often varying based on the drug’s tier.
- Coinsurance: A percentage of the cost of a prescription drug that the beneficiary is responsible for paying, typically after meeting the deductible.
- Initial Coverage Limit: The maximum amount of prescription drug costs that a Part D beneficiary’s plan will cover within a certain period.
- Coverage Gap (Donut Hole): A temporary phase in Part D coverage during which beneficiaries pay a larger share of their prescription drug costs until reaching catastrophic coverage.
- Catastrophic Coverage: The phase of Part D coverage that applies after a beneficiary has spent a certain amount out-of-pocket on prescription drugs in a calendar year. During this phase, costs are significantly reduced.
- Preferred Pharmacy: A pharmacy that offers prescription drugs covered by a Part D plan at a lower cost to the beneficiary.
- Mail-Order Pharmacy: A service that allows beneficiaries to order prescription medications through the mail, often at a lower cost, for a 90-day supply.
- Medication Therapy Management (MTM): A program offered by some Part D plans to help beneficiaries optimize their prescription drug regimens and manage their medications effectively.
- Annual Notice of Change (ANOC): A notice sent by Part D plans to beneficiaries each fall, detailing changes to plan costs, coverage, and benefits for the upcoming year.
- Extra Help (Low-Income Subsidy): A program that assists individuals with limited income and resources in affording prescription drug costs associated with Part D coverage.
- Part D Penalty: A financial penalty imposed on beneficiaries who do not enroll in a Medicare Part D plan when they are first eligible and subsequently go without creditable prescription drug coverage for a period.
- Prescriber: A healthcare provider, such as a doctor or nurse practitioner, who is authorized to write prescriptions for medications.
- Annual Enrollment Period (AEP): The period each year (usually from October 15 to December 7) during which beneficiaries can enroll in or make changes to their Part D prescription drug plans.
- Special Enrollment Period (SEP): A period outside of the Annual Enrollment Period during which eligible individuals can enroll in, disenroll from, or switch Part D plans due to certain qualifying events.
- Medicare Part D Donut Hole Discount: A discount on brand-name prescription drugs provided by drug manufacturers during the coverage gap (donut hole) to help reduce out-of-pocket costs for beneficiaries.