Glossary of Terms
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
A
Assets
Property you own that the government may review when you apply for assistance. The government counts cash or any property that can be turned into cash within 20 days as an asset. It does not include your primary home or burial expenses, but does include your:
- Checking and savings accounts
- Certificates of deposit
- IRAs and 401(k)s
- Stocks, bonds, etc.
B
Brand Drug
When a company develops a new drug and develops a patent for the drug, no other company can sell that drug for 20 years. After that, generic versions of the same drug can be made and sold by other companies. In general, "brand" drugs cost more than "generics."
C
Catastrophic Limit
The highest amount of money you will have to pay out of pocket over the course of a calendar year for certain covered prescription drug charges.
Creditable Coverage
Prescription drug coverage, from a plan other than the Medicare Prescription Drug Program, which meets or exceeds the Medicare standards.
D
Deductible
The initial amount you must pay out of pocket each calendar year before Medicare begins to contribute its percentage (under the standard or basic Medicare Prescription Drug Plan).
Dual Eligibles
Persons who are entitled to both Medicare and Medicaid benefits.
E
Enrollment Period
The limited period of time during which you can join a Medicare Prescription Drug Plan or Medicare Advantage Part D Plan if it is "open" and accepting new Medicare members.
F
Formulary
A list of prescription drugs along with their formulas, uses, dosages and methods of preparation. In some Medicare health plans or Medicare Prescription Drug Plans, doctors must order or use only drugs listed on the plan's formulary.
G
Gap of Coverage
Another name for the step in a Prescription Drug Plan in which you pay all of your expenses for eligible drugs, until you have spent $4,050.
Generic Drug
A prescription drug that has the same active ingredient formula as a brand name drug. Generic drugs usually cost less than brand name drugs and are rated by the Food and Drug Administration (FDA) to be as safe and effective as brand name drugs.
M
Mail order pharmacy
Mail order pharmacies are used by many plans as a cost saving and convenient alternative to retail pharmacies. Members order their drugs via phone, fax or e mail and the prescription arrives within 2-4 days.
Medicaid
A joint Federal and State program that helps with medical costs for people with low incomes and limited resources.
Medicare
A federal health insurance program for people age 65 and older and for individuals with disabilities.
Medicare Advantage
Medicare Advantage is an expanded set of options for the delivery of health care under Medicare. While all Medicare beneficiaries can receive their benefits through the original fee for service program, beneficiaries entitled to Medicare Part A and enrolled in Part B can choose to participate in a Medicare Advantage plan instead. Organizations that seek to contract as Medicare Advantage plans must meet specific organizational, financial, and other requirements. Following are the primary Medicare Advantage plans:
- Coordinated Care plans, which include health maintenance organizations (HMOs), managed care plans (MCOs), provider sponsored organizations (PSOs), preferred provider organizations (PPOs) and other certified coordinated care plans and entities that meet the standards set forth in the law.
- Private, Unrestricted Fee for Service plans, which allow beneficiaries to select certain private providers. For those providers who agree to accept the plan's payment terms and conditions, this option does not place the providers at risk, nor does it vary payment rates based on utilization.
These Medicare Advantage plans are required to provide at least the current Medicare benefit package, excluding hospice services. Plans may offer additional covered services and are required to do so (or return excess payments) if plan costs are lower than the Medicare payments received by the plan. Beginning in 2006, a new regional Medicare Advantage plan program will be established to allow regional coordinated care plans to participate in the Medicare Advantage program.
Medigap
A Medicare supplement insurance policy sold by private insurance companies to fill "gaps" in coverage.
O
Out of pocket limit
The annual amount you can be required to spend on prescription drugs.
P
Premium
The money one pays to have an insurance plan. For the new Medicare Prescription Drug Program, it will be monthly.
Prior Authorization
Some drug plans require the physician prescribing a medication to verify the reason for the usage of the drug before it will allow it to be filled.
Q
Quantity Limits
Dosage and frequency restrictions imposed by specific drug plans for a given time period on a certain drug.
S
Step Therapy
The practice of beginning drug therapy for a medical condition with the most cost effective and safest drug therapy and progressing to other more costly or risky therapy, only if necessary. The aims are to control costs and minimize risks.
T
Tiers
A specific list of drugs. Drug plans may have several tiers, and co-payment amounts depend on which tier the drug is listed. Plans choose their own tiers, so members should refer to their benefit book or contact the plan for details.