Glossary

Benefit period

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In Original Medicare a benefit period begins on the first day of an inpatient hospital stay and ends when you have been out of the hospital or skilled nursing facility for 60 consecutive days.

Catastrophic Coverage Stage

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The stage in the Part D Drug Benefit where you pay a low copayment or coinsurance for your drugs after you or other qualified parties on your behalf have spent $5,000 (for plan year 2018) in covered drugs during the covered year.

Centers for Medicare & Medicaid Services (CMS)

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The Federal agency that runs the Medicare program. In addition, CMS works with the states to run the Medicaid program. CMS makes sure that beneficiaries in both programs are able to get access to high-quality health care.

Coinsurance

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The percent that you have to pay for a prescription drug. For example, if your coinsurance is 10 percent and the cost of the drug is $10, you will pay $1. With some plans, you do not pay coinsurance until you have first paid a deductible.

Copayment (or copay)

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A copayment is a fixed amount you pay for a prescription drug you receive. For example, you may need to pay a $5 copay for a prescription drug.

Cost-sharing

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This is the portion of a prescription drug that you are responsible for paying. Types of cost-sharing include copayments, coinsurance or a deductible.

Deductible

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A set amount of money you must pay before you receive any coverage for medical services or prescription drugs. Generally, deductibles are annual and apply to Medicare Parts A, B and D. Deductibles may also apply to Medicare Supplement plans.

Evidence of Coverage (EOC)

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The Evidence of Coverage explains your Medicare coverage, what your provider must do, your rights, and what is required of you as a member of our plan.

Explanation of Benefits (EOB)

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The Explanation of Benefits is a statement that you receive every month that you use your Medicare Part D prescription drug benefits. This statement is sent to you by your plan, and provides you with complete information regarding the prescription drug services that you have received. Also included in your EOB are any payments and costs that you are responsible for. The EOB is not a bill, rather a statement from your plan that is provided for your convenience.

Initial Coverage Limit

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The limit of coverage under the Initial Coverage Stage.

Initial Enrollment (or Election) Period (IEP)

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A 7-month period when you are first able to enroll in Medicare (3 months prior to your 65th birthday, the month of your birthday, and 3 months after).

Initial Coverage Stage

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A stage that you enter after your deductible has been met, and before your total drug expenses reach $3,750 (in 2018). This includes amounts that you have paid, and amounts that your plan has paid on your behalf.

Medicare Advantage plan

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A Medicare health plan option in which a private health plan manages Medicare benefits for its members. The most common types of Medicare Advantage plans are HMO, PPO and PFFS plans. Some Medicare Advantage plans may also offer Medicare prescription drug (MA-PD) benefits for their members.

Medicare Prescription Drug Plan

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A Medicare Prescription Drug Plan may be either a stand-alone Prescription Drug Plan that you can join if you have Original Medicare or a Medigap/Medicare Supplement plan, or a Medicare Advantage (or other health plan) that includes Medicare prescription drug coverage in the plan.

Medicare Supplement plan

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Health insurance policies that typically have standardized benefits and are sold by private insurance companies. Medigap policies work together with your Medicare Part A and Part B coverage. They generally allow you to go to any doctor or hospital that accepts Medicare. There are 10 standard Medigap policies — Plans A, B, C, D, F, G, K, L, M and N. Each plan has a different set of benefits and premiums. Many Medigap plans come with options that allow you to purchase more benefits. Not all health coverage companies offer all 10 plans and, in some states, there are other types of Medigap options. If you choose a Medigap plan and want drug coverage, you must purchase a stand-alone prescription drug plan.

Network Pharmacy

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A network pharmacy is a pharmacy that has contracted with our Part D plan, and allows our members to receive their prescription drug benefits.

Part A

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Medicare Part A typically pays for inpatient hospital expenses.

Part B

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Medicare Part B typically covers outpatient health care expenses, including doctor fees.

Part D

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The part of the Medicare program that provides prescription drug coverage.
 

Preferred Cost Sharing

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Preferred cost-sharing means lower cost-sharing for certain covered Part D drugs at certain network pharmacies.

Preferred Network Pharmacy

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A preferred network pharmacy is a pharmacy that contracts with a Part D plan and allows the plan’s members to receive preferred cost sharing (the lowest possible copays and coinsurance) when filling their prescriptions using their plan benefit in the Initial Coverage stage.

Premium

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The payment to an insurance carrier or prescription drug plan for medical benefits or prescription drugs purchased.

Special Enrollment Period (SEP)

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A time not during the annual election period or initial enrollment period when you are able to join, change, or drop your Medicare plan. An SEP can also be trigged by certain events. For example, a change in your residence may result in an SEP.

Annual enrollment period (AEP)

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Sometimes called the annual election period. AEP runs from October 15 through December 7 each year and you make changes to your prescription drug coverage during this time.

Part D Late Enrollment Penalty (LEP)

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This is an amount that may be added to your Part D monthly premium if you didn’t sign up for a Part D plan when you were first eligible. If you had creditable coverage, for example, coverage from an employer or union group, the penalty will not be applied. The penalty amount varies depending on how long you went without Part D coverage. To learn more about the Part D LEP, visit medicare.gov.

Standard Cost Sharing

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Standard cost-sharing is cost-sharing other than preferred cost-sharing offered at a network pharmacy.

Standard Pharmacy

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A standard pharmacy is a pharmacy that contracts with a Part D plan and allows the plan’s members to fill their prescriptions using their plan benefit, but do not offer the same low copayments and coinsurance as a preferred pharmacy.

TTY

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Teletypewriter (TTY) is a communication tool used by people who are deaf, hard-of-hearing, or who may have a speech impediment.