Catastrophic coverage: Refers to the much higher level of coverage (95% or better), depending on your income you receive for all covered drugs after you have spent more than $4,050 in 2008.
Co-pay: What you pay for each drug. Usually a set dollar amount.
Co-insurance: The percent of the drug cost you may be required to pay after you pay any deductibles. Under Part D co-insurance will vary depending on how much you have spent.
Coverage determination: A statement by a Part D plan about their decision on whether your prescription is covered under the plan and how it is covered. The official “coverage determination” is from the Part D plan, not from the pharmacist, and has to be specially requested by you. You must get a coverage determination for the Part D Plan in order to appeal how one of your drugs is being paid.
Creditable coverage: Drug coverage, other than a Part D Plan, that has been deemed as good as or better than Part D. If you received a notice stating your current coverage is creditable, keep this notice in a safe place. You can keep this coverage for now. Later you can enroll in a Part D plan without a late enrollment penalty within 63 days if your creditable coverage ends.
Deductible: The amount of spending by you that is required before insurance benefits are paid by the Part D Plan. For example, you may pay a $275 deductible before your plan begins to pay on your prescriptions. Not all Part D plans require a deductible.
Donut hole: A gap in coverage that begins once the combined payments of you AND your plan reach $2,510 in total drug costs. You pay all of your drug costs in full while you are in the donut hole.
Extra Help: A federal subsidy for people with limited income and assets to help pay for Part D.
Formulary: A list of specific prescription drugs that a Medicare drug plan will cover subject to limits and conditions.
Initial Enrollment Period: This is the same for Medicare Part D drug coverage as for Medicare Part B. It is the seven-month period to sign up without a penalty that begins three months before the month an individual first meets the eligibility requirements for Medicare and ends three months after the month of the eligibility event. Part D enrollment is voluntary and requires action on your part to enroll.
Late enrollment penalty: A late premium penalty in the form of a cumulative 1%-per-month (based on a national average premium) that must be paid if you have a continuous period of 63 days or longer without creditable prescription drug coverage at any time after the end of your initial enrollment period.
Non-preferred drug: A drug that a plan discourages access to, typically by requiring a larger co-payment.
Open Enrollment: Called the Annual Election Period, it occurs every Nov. 15 to Dec. 31, in which Medicare enrollees can sign up for Part D or change their current Part D provider.
Out-of-pocket payments: Payments by the beneficiary toward the total cost of covered prescriptions, including the deductible, coinsurance, co-payments, and the cost of prescriptions during the donut hole.
Preferred drug: A drug that a plan encourages physicians and patients to choose, typically by including it on a formulary and requiring a smaller co-payment or no co-payment.
Premium: The amount a beneficiary pays monthly for Part D coverage.
Prior authorization: If a Plan requires “Prior Authorization” for a particular drug, your doctor must first contact the plan and show there is a medically necessary reason why you must use that particular drug for it to be covered.
Quantity limits: Some drugs such as narcotics, and other drugs, are limited in quantity. As long as a dosage is in the usual range you may use mail order. If you disagree with the quantity limits, you may ask the plan for an exception.
Step therapy: If a Plan requires “Step Therapy” for a particular drug, you must first try certain less expensive drugs that have been proven effective for most people with your condition. If you previously tried other drugs but they didn’t work, your doctor can contact the plan to request an exception. If your doctor’s request is approved, the step-therapy drug will be covered.
Tier: Large categories of drugs within the plan’s list of covered drugs. Plans do not have to use tiers, but may do so. Tier 1 is always generic drugs. The plan determines which drugs go into Tier 2, Tier 3, and the Specialty Drug tier, if they use it. |
Counseling and Services 
