Glossary and Acronyms

Medicare Terms and What They Mean

A - D  |  E - H  |  I - P  |  Q - Z

 

A - D

Annual Election Period (AEP):

The period that extends from November 15 through December 31 each year. If you’re eligible for Medicare prescription drug coverage you may change prescription drug plans, change Medicare Advantage plans, return to original Medicare or enroll in a Medicare Advantage plan for the first time. The new coverage you choose will take effect on January 1st.

Catastrophic Coverage:

The fourth and last phase of Medicare Part D coverage following the Coverage Gap. In this phase, all plan members pay $2.50 per month for generics, and $6.30 per month for brand name medications—or 5% of the medication's retail cost, whichever is higher.

Coinsurance:

A percentage of the cost you pay when your plan does not cover 100% of the cost. For example, a plan may cover 80% of the cost of your medicine or your hospital visit; the other 20% is your coinsurance.

Copay:

This is a fixed dollar amount that you pay when your plan does not cover 100% of the cost of your medicines. For example, if you pay a certain amount for a medicine, or for a visit to the doctor, that amount is your copay.

Coverage Gap (sometimes referred to as the "donut hole"):

The third phase of Medicare Part D coverage following the Initial Coverage phase. You reach this phase after the total annual drug costs paid by you and your prescription drug plan have reached $2,830 (not counting your plan premium payments). While in the Coverage Gap phase you are responsible for paying 100% of your prescription costs until you have paid $4,550 in true out-of-pocket costs.

Creditable Prescription Drug Coverage:

Prescription drug coverage that is at least as good as Medicare coverage. If you go without Creditable Coverage for a period of 63 days in a row or longer after you are first eligible, you may have to pay a late enrollment penalty.

Deductible:

A specific dollar amount you may be required to pay out of pocket before your plan begins to cover your prescriptions.

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E - H

Electronic Funds Transfer (EFT):

A convenient member service you enroll in where premium payments are electronically deducted from a bank account, eliminating check writing and paper billing.

Explanation of Benefits (EOB):

A statement you receive for each month you use your Medicare Advantage or Medicare Part D Prescription Drug benefits.  If you have a Medicare Advantage Prescription Drug plan or Medicare Part D Prescription drug plan your  Part D prescription drug coverage. Your EOB shows your “Total Drug Spend” which is what both you and your plan have paid for your Part D drugs to date. This amount counts towards your initial coverage limit of $2830. The EOB also shows your year-to-date True Out-Of-Pocket costs (sometimes referred to as TrOOP). The amount counts towards reaching the Catastrophic Coverage Phase.

Extra Help program:

A financial assistance program from Medicare where your eligibility is determined by the Social Security Administration. If you qualify, Social Security will enroll you in the program. The amount of assistance you receive will depend on your financial situation and income.

Formulary:

A list of all drugs covered by a Medicare Part D prescription plan or Medicare Advantage Prescription Drug plan. 

General Enrollment Period (GEP):

If you did not enroll in Part B when you were first eligible for Medicare, you may choose Part B coverage during the General Enrollment Period. The General Enrollment Period extends from January 1 through March 31 each year. Enrollment becomes effective on July 1 of the same year.

If you do not enroll in Part B when you are first eligible, and don’t have other coverage, you may have a late enrollment penalty added to your Part B premium when you do enroll. The premium is 10% of the Medicare Part B premium for each year that you went without Part B coverage. You must continue to pay this penalty as long as you are enrolled in Medicare.

Generic Drug:

A prescription medicine made of the same active ingredients as a brand-name medicine, but usually less expensive because it is produced and distributed without patent protection.

Health Maintenance Organization (HMO):

Sometimes called "managed care organizations," HMOs contract with doctors and hospitals who agree to accept their payments. In an HMO, you receive your care from the doctors, hospitals and other providers who contract with the HMO.

(Universal American Medicare Advantage HMO plans operate under the names Generations Healthcare in Oklahoma, Today’s Health^® in Wisconsin and TexanPlus^® in Texas.)

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I - P

Initial Coverage:

The first phase of Medicare Part D coverage that, depending on the plan, starts after you meet your yearly deductible for Part D.

Initial Enrollment Period (IEP for Part D):

The period that begins three months before the month of your Medicare eligibility and ends three months after. If you become eligible for Medicare because you’re turning 65, the month of your Medicare eligibility is the month of your 65th birthday. If you become eligible for Medicare due to a disability, your month of eligibility is the 25th month of receiving Social Security Disability Insurance.

Medication Therapy Management (MTM):

Prescription drug plan services designed to help you get the most benefit from drug therapy, usually as a one-on-one session with a pharmacist.

Medicaid:

A joint Federal and State program that helps with medical costs for some people with low incomes and limited resources. Medicaid programs vary from state to state, but most health care costs are covered if you qualify for both Medicare and Medicaid.

Open Enrollment Period (OEP):

Extends from January 1 through March 31 each year, during which you have one opportunity to enroll in, disenroll from or change a Medicare Advantage plan. Changes made during Open Enrollment become effective the month after the change is made. (You may not add or drop Medicare Part D prescription drug coverage during this time.)

Preferred Provider Organization (PPO):

A health plan composed of a network of physicians, hospitals or other providers that provide health care services at a reduced fee. (Universal American’s PPO plans operate as Today’s Options^® in selected states around the country.)

Premium:

The periodic payment (usually monthly) to Medicare, an insurance company, or a health care plan for health or prescription drug coverage.

Prior Authorization:

A plan requirement to get approval from the plan before you fill your prescriptions. If you don’t get approval, the plan may not cover the drug.

Private Fee-for-Service plans (PFFS):

A Medicare Advantage health plan offered by private insurance companies contracted and approved by Medicare. Medicare pays a set amount of money every month to the Private Fee-for-Service organization to arrange for healthcare coverage. (Universal American PFFS plans operate as Today’s Options^® in every state with the exception of Alaska, Delaware, New Mexico, Rhode Island and Wyoming.)

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Q - Z

Quantity Limits:

For certain drugs, Medicare Part D and Medicare Advantage Prescription Drug Plans may limit the number (or amount) of the drugs they will cover within a certain time period.

Special Election Period (SEP):

Special Election Periods allow you to enroll in, or change plans outside of Medicare’s standard enrollment periods. For example, if you move out of a Medicare Advantage Plan or PDP service area, you have a Special Election Period to enroll in a plan that is available in your new location. If you move into, reside in, or move out of a nursing home you may also have a Special Election Period. If you have Medicare and Medicaid, you have a Special Election Period that allows you to change Part D drug plans at any time.

Specialty Coinsurance:

The percentage of the cost you pay for specialty prescriptions, such as injectable drugs and biopharmaceuticals.

Specialty Drugs:

A Specialty tier drug is a very high cost or unique prescription drug which may require special handling and/or close monitoring. Specialty drugs typically treat complex, chronic conditions and are often injected.

State Pharmacy Assistance Program (SPAP):

A state program that provides people assistance in paying for drug coverage, based on financial need, age or medical condition and not based on current or former employment status. These programs are run and funded by the states.

Step Therapy:

A plan requirement to first try certain drugs for treatment of a medical condition before a different drug will be covered for that same condition.

Tier:

Prescription Drug Plans put all covered drugs on a tier or level. The tier determines how much you will pay for a drug. The cost can be either a fixed amount called a copay,or a percent of the cost of the drug calledcoinsurance.

True Out-Of-Pocket (TrOOP) cost:

An annual calculation of what you have paid for a Medicare Advantage Prescription Drug Plan or Medicare Part D Prescription Drug Plan’s formulary medicines, including any deductibles and copays. This calculation includes what you have paid and includes any assistance you have received from programs such as Extra Help. When your true out-of-pocket costs have reached $4,550, you become eligible for the Catastrophic Coverage phase of Part D coverage, which allows you to get medicines for a much lower cost.

Welcome Medication Review:

A complimentary service offered by Community CCRx to welcome all newly enrolled plan members with a thorough evaluation of drug regimens by a pharmacist. The purpose is to look for money-saving generic opportunities, review medication management routines and generally ease your transition to a new plan and new formulary.

Yearly deductible:

The amount you must pay for your Medicare Part D or Medicare Advantage Prescription Drug coverage where, depending on your plan, a certain dollar amount (that you pay) must be met before the Initial Coverage phase can begin.

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