Throughout this website and in your printed materials, you may find terms relating to your Medicare Prescription Drug Plan that are not familiar to you. This glossary provides an alphabetical listing of definitions for many of these terms. You can scroll through the listing or skip to a section by selecting one of the letters below.

A
Abridged formulary
A partial listing of commonly used drugs covered by your plan. It is periodically updated during the plan year.

Annual Election Period
The time each year when anyone with Medicare Part A or Medicare Part B can enroll or disenroll from a Medicare Prescription Drug Plan. This period runs from November 15 to December 31 each year for coverage that begins on January 1 of the following year. Some members may also be allowed to enroll or disenroll at other times of the year if they are entitled to a special enrollment period.

Annual enrollment period
The time each year when anyone with Medicare Part A or Medicare Part B can enroll or disenroll from a Medicare Prescription Drug Plan. This period runs from November 15 to December 31 each year for coverage that begins on January 1 of the following year. Some members may also be allowed to enroll or disenroll at other times of the year if they are entitled to a special enrollment period.

Annual Notice of Change
A package you should receive by October 31 each year that includes a letter detailing changes in your benefit starting January 1 of the following year. This package also includes either the Summary of Benefits or The Evidence of Coverage and may include the formulary for the following year.

Appeal
Any of the procedures that deal with the review of an unfavorable coverage determination (a decision that has been made about your coverage). There is a specific process you must follow when making an appeal request. Your Evidence of Coverage provides details for doing this.

Area Agencies on Aging
A national network of agencies that help older adults. Your local agency can help you get services and information, including counseling about your benefits, home-delivered meals, transportation, employment services, referrals to senior centers, adult day care, and long-term care ombudsman programs.

B
Biologicals
Medical preparations, such as insulin and vaccines, made by using living organisms and their products. Many of these are covered under Medicare Part D.

Brand-name drug
A drug that is marketed under a trademark-protected name. These drugs are often available from only one manufacturer.

C
Catastrophic Coverage
What most plans call the stage of coverage that follows the Coverage Gap. You reach this stage after your true out-of-pocket costs (what you and others on your behalf pay) for Part D drugs reach a certain amount specified by the Centers for Medicare & Medicaid Services. During this stage, you pay a low co-payment or coinsurance for your drugs. Your Evidence of Coverage describes the various stages of coverage in detail.

Centers for Medicare & Medicaid Services (CMS)
The Federal agency that runs the Medicare program.

Co-payment
A fixed portion of a drug's cost that you are responsible for paying out of pocket. (For example, $6.00 for a 1-month supply of generic drugs at retail)

Coinsurance
A percentage of a drug's cost that you are responsible for paying out of pocket. (For example, if your coinsurance is 20 percent, you would pay $20.00 for a drug that costs $100.00.)

Comprehensive formulary
A complete listing of all the drugs covered by your plan. It is periodically updated during the year.

Coordination of benefits (COB)
A process that is used to determine the amount that different plans pay when a member has primary coverage through a Medicare prescription drug plan and secondary coverage through one or more supplemental payors. Although a member cannot have more than one Medicare Part D prescription drug plan at a time, an employer or other plan sponsor may choose to provide additional coverage to an individual's Medicare drug benefit through a secondary plan.

Cost sharing
The portion of the prescription cost that a member is responsible for paying, such as a co-payment, coinsurance, or deductible.

Coverage determination
A decision made by the plan about whether it will cover a drug and what portion of the cost, if any, the member will be responsible for paying. A member or a member's authorized representative must formally request a coverage determination by calling or writing to the plan.

Coverage Gap
The gap between the Initial Coverage Period and the Catastrophic Coverage stage when, under most Medicare drug plans, you are responsible for paying all of your prescription drug costs out of pocket. (Also called the Donut Hole.) You reach the gap under the standard Medicare prescription drug benefit when the amount that you and your plan have spent for your Part D drugs reaches a certain amount specified by the Centers for Medicare & Medicaid Services.

Covered drugs
A general term that refers to all of the prescription drugs covered by your plan.

Creditable Coverage
Non-Medicare drug coverage (such as a plan offered by a current or former employer or union) that is at least as good as the standard Medicare prescription drug coverage. If a plan you are currently in offers Creditable Coverage, you will not pay any penalties if you decide to sign up for a Medicare drug plan after your initial enrollment period.

D
Deductible
An amount that you pay out of pocket before the plan begins covering your drugs.

Disenrollment
The process by which your plan membership ends. Disenrollment can be voluntary (for example, when you change plans) or involuntary (for example, if you don't pay your monthly premiums). You can voluntarily disenroll only during the annual election period (November 15 through December 31) unless you are entitled to a special enrollment period.

Donut Hole
Another term for the Coverage Gap. The gap between the Initial Coverage Period and the Catastrophic Coverage stage when, under most Medicare drug plans, you are responsible for paying all of your prescription drug costs out of pocket.

Dosage form
The physical form in which a medication is made and taken. Common dosage forms include tablets, capsules, liquids, eye drops, ear drops, etc.

Dosing schedule
The amount of a medication to take and how often to take it.

Drug exclusion
A drug that does not qualify for Part D coverage and is therefore not covered under your plan. Examples of the types of drugs excluded by Medicare are drugs when used for cosmetic purposes or hair growth and barbiturates and benzodiazepines. (You can find more information about drug exclusions in your Evidence of Coverage and in your formulary.)

Drug tiers
The level of coverage for each drug, for example, "specialty drug tier" or "generic drug tier." Your coinsurance or co-payment will depend on which tier the drug is in. (You can find more information about drug tiers in your Evidence of Coverage and in your formulary.)

Dual eligible
When a person is entitled to both Medicare (Part A and/or Part B) and Medicaid. If you are a dual-eligible beneficiary, you probably qualify for extra help from the government to pay for your prescription drugs and have been automatically assigned to your plan.

E
Evidence of Coverage (EOC)
A document that explains your coverage, rights, and responsibilities as a member of the plan. It also defines the plan's obligations to you.

Exception
A type of review or coverage determination that, if approved, gives you permission to bypass certain plan rules on a specific drug. For example, you may be able to obtain coverage for a drug that is not on the plan's formulary, to get a non-preferred drug at the plan-preferred price, or to be exempt from having to try another drug first if step therapy rules apply.

Explanation of Benefits (EOB)
A monthly statement that you receive if you have used your prescription drug coverage during the previous month. It specifies the total amount that you have spent on prescription drugs and the total amount that your plan has paid out.

F
Food and Drug Administration (FDA)
The Federal agency responsible for overseeing drug safety and effectiveness, among other things.

Formulary
The list of drugs covered by your plan. The formulary also provides a brief description of your coverage. Your plan provides you with both an abridged formulary (a partial listing of covered drugs) and a comprehensive formulary (a complete listing of covered drugs).

Formulary 60-day notice
A letter notifying you that a change is being made to the formulary. The Centers for Medicare & Medicaid Services requires that we notify you at least 60 days in advance of any changes we make to your formulary unless a drug is being removed by the manufacturer or the Food and Drug Administration because of issues with safety or effectiveness.

Formulary drug
Any drug that is covered and listed on a plan's formulary.

G
Generic alternative
A generic drug that may be given in place of a brand-name drug to achieve similar results for many people. A generic alternative may contain different active ingredients than the brand-name drug, but it usually provides a similar effect when treating a specific condition. For example, lisinopril 10 mg is a generic alternative to Cozaar® 25 mg because it typically provides similar benefits even though it has a different active ingredient.

Generic drug
A drug that contains the same active ingredients and meets the same strict Federal regulations as the original brand-name drug (even though it may differ in color, size, or shape). A generic drug is the same as the brand-name drug in terms of quality, strength, purity, and dosage form (for example, tablet, capsule, or liquid). The Food and Drug Administration has indicated that generic drugs are safe and effective and can be expected to work the same as their brand-name counterparts. They usually cost less than brand-name drugs.

Generic equivalent
A drug that contains the same active ingredients; is the same in quality, strength, and purity; has the same dosage form (such as tablet, capsule, liquid); and is taken the same way as its brand-name counterpart. For example, simvastatin is a generic equivalent for Zocor® because it treats the same condition, is the same in quality, strength, and purity, and has the same active ingredient as Zocor.

Grievance
A type of complaint that generally concerns service or quality of care. This type of complaint does not include coverage or payment disputes. See your Evidence of Coverage for details. (See also Appeal.)

I
Initial Coverage Period
The period that begins after you have met your annual deductible (if your plan has one) and before your total drug expenses reach the initial coverage limit (including what you pay and what your plan pays).

Initial enrollment period (IEP)
The period when you are first eligible to enroll in Medicare. This period is 7 months long and includes the entire calendar month in which you first become eligible for Medicare, the 3 calendar months before that month, and the 3 calendar months after that month. For example, if you turn 65 on June 15, your initial enrollment period will run from March 1 through September 30.

L
Late enrollment penalty
The extra amount you have to pay in premiums if you decide not to enroll in a Medicare Prescription Drug Plan when you first become eligible or are not in a plan that offers Creditable Coverage. The penalty is 1 percent of the premium for each month you wait. This penalty amount will be charged every month for as long as you are in a Medicare prescription drug plan.

Low-income subsidy (LIS)
Financial assistance that Medicare provides to beneficiaries who meet specific income and resource limits. This assistance helps to pay for prescription drug costs not covered by a Medicare drug plan.

Long-term drugs
Drugs that are taken on a regular basis (3 months or more) for a chronic or long-term medical condition. (Sometimes called maintenance drugs.)

M
Maintenance drugs
Drugs that are taken on a regular basis (3 months or more) for a chronic or long-term medical condition. (Also called long-term drugs.)

Medco By Mail
A network of mail-order pharmacies that belong to Medco. These pharmacies fill your prescriptions for long-term drugs and deliver them directly to you by mail.

Medicaid
A joint Federal and state program that helps with medical costs for some people with low incomes and limited resources. Certain people with Medicare are also eligible for Medicaid. Most healthcare costs are covered if a person qualifies for both Medicare and Medicaid. (See also dual eligible.)

Medicare
The Federal health insurance program for people 65 years of age or older, some people under age 65 with disabilities, and people with end-stage renal disease (generally those with permanent kidney failure who need dialysis or a kidney transplant).

Medicare + Choice
An earlier name for Medicare Advantage Plan.

Medicare Advantage Plan
A plan offered by a private company that contracts with Medicare to provide Medicare Part A and Medicare Part B. A Medicare Advantage Plan can be an HMO, PPO, or a Private Fee-For-Service plan.

Medicare Advantage Plan with prescription drug coverage (MA-PD)
A Medicare Advantage plan that also provides Medicare Part D prescription drug coverage.

Medicare Part A
The part of Medicare that covers much of the cost of hospital care, home health care, or a skilled nursing facility. (See also Original Medicare Plan.)

Medicare Part B
The part of Medicare that covers most of the cost of your doctor visits, outpatient care, and other related services. Certain drugs are covered under Medicare Part B, and these cannot also be covered under Medicare Part D.

Medicare Part C
Another name for Medicare Advantage plan. A plan offered by a private company that contracts with Medicare to provide Medicare Part A and Medicare Part B. A Medicare Advantage Plan can be an HMO, PPO or a Private Fee-For-Service Plan.

Medicare Part D
Also known as Medicare prescription drug coverage, this is Medicare's insurance coverage to help people with Medicare pay for their prescription drugs, vaccines, biologicals, and some supplies not covered by Medicare Part B. Medicare Part D went into effect in 2006 as a result of the Medicare Prescription Drug Improvement and Modernization Act of 2003.

Medicare prescription drug coverage
Another name for Medicare Part D. Medicare's insurance coverage to help people with Medicare pay for their prescription drugs, vaccines, biologicals, and some supplies not covered by Medicare Part B. Medicare Part D went into effect in 2006 as a result of the Medicare Prescription Drug Improvement and Modernization Act of 2003.

Medicare Prescription Drug Plan (PDP)
A stand-alone Medicare Part D plan. Medicare PDPs are Medicare-approved plans that are provided by private companies.

Medicare supplemental insurance
Another name for Medigap insurance. A specific type of insurance policy that provides additional coverage for costs not covered under the Original Medicare Plan. Individuals who are covered under a Medicare Advantage Plan cannot sign up for Medigap insurance.

Medication Therapy Management (MTM) programs
Free programs offered to selected Medicare Part D members who have certain medical conditions or chronic illnesses, who are taking many prescription drugs, and who have high drug costs. MTM programs are designed to help members make better use of their coverage and improve their understanding and use of medication.

Medigap insurance
A specific type of private insurance policy that provides additional coverage for costs not covered under the Original Medicare Plan. Individuals who are covered through a Medicare Advantage Plan cannot sign up for Medigap insurance. (Also called Medicare supplemental insurance.)

Monthly plan premium
The amount that you pay each month for your Medicare prescription drug coverage. You can choose to pay your premiums monthly, quarterly (four times a year) or annually (one time a year).

Multi-source drug
A brand-name drug for which the patent protection has expired. As a result, generic drugs are available, and the drug is available from multiple sources.

N
Network pharmacy
A pharmacy that participates in your plan's network. In most cases, you need to use a network pharmacy to pay the amounts specified by your plan. A list of network pharmacies can be found in the Pharmacy Directory.

Non-creditable Coverage
Prescription drug coverage that is not as good as the standard Medicare prescription drug coverage. If you have Non-creditable Coverage, you may have to pay a late enrollment penalty if you choose to enroll in a Medicare drug plan after your initial enrollment period.

Non-preferred brand-name drug
A brand-name drug that costs more than generic or preferred drugs. (See also drug tiers.)

Notice of Creditable Coverage
A letter from an employer, union, or other health plan sponsor that tells you that the coverage you have under that sponsor's prescription drug benefit is at least as good as the standard Medicare prescription drug coverage. (See also Creditable Coverage.)

Notice of Non-creditable Coverage
A letter from an employer, union, or other health plan sponsor that tells you that the coverage you have under that sponsor's prescription drug benefit is not as good as the standard Medicare prescription drug coverage. (See also Non-creditable Coverage.)

O
Original Medicare Plan
A fee-for-service health plan that lets you go to any doctor, hospital, or other healthcare supplier who accepts Medicare. This plan has two parts: Medicare Part A (hospital insurance) and Medicare Part B (medical insurance).

Other Health Information survey (OHI)
A questionnaire that you must fill out to provide your plan with additional information about your health and insurance coverage. The Centers for Medicare & Medicaid Services (CMS) requires that every member of a Medicare Prescription Drug Plan fill out this questionnaire.

Out-of-pocket costs
The amount of your own money that you use to pay for your covered drugs. (See also true out-of-pocket costs.)

Over-the-counter drug (OTC)
A drug that is available without a prescription.

P
Part D drugs
Drugs that Congress permits Medicare Part D plans to offer as part of a standard Medicare prescription drug benefit. Drugs that are covered under Medicare Part D cannot also be covered under Medicare Part B. Certain categories of drugs, such as benzodiazepines and barbiturates, are specifically excluded from coverage under Part D. (See also drug exclusion.)

Plan-preferred drug
A brand-name drug that requires a higher co-payment than a generic drug but lower than a non-preferred brand-name drug. (Also called a preferred brand-name drug.)

Preferred brand-name drug
Another name for plan-preferred drug. A brand-name drug that requires a higher co-payment than a generic drug but lower than a non-preferred brand-name drug.

Premium
The amount that you pay each month for your Medicare prescription drug coverage. You can also choose to pay your premiums quarterly (four times a year) or annually (one time a year).

Primary coverage
Coverage from the main provider of your prescription drug benefit. This may be from a stand-alone Medicare drug plan, a health plan, or a plan sponsor (such as an employer or union).

Prior authorization
Rules or conditions that must be met before certain drugs may be covered by your drug plan. Approval must be obtained in advance to get coverage for these drugs. Covered drugs that need prior authorization are indicated in the formulary (list of covered drugs).

Q
Quantity limits
Rules that limit the amount of the drug the plan covers per prescription or for a specific period of time. Covered drugs that have quantity limits are marked in the formulary.

R
Retail network pharmacy
A retail pharmacy that participates in your plan's network. In most cases, you need to use a network pharmacy to pay the amounts specified by your plan. A list of network pharmacies can be found in the Pharmacy Directory. (Also called a network pharmacy.)

Retail pharmacy
A chain or independently owned pharmacy. In most cases, a retail pharmacy must be in your plan's network in order for your drug to be covered. (See also network pharmacy and retail network pharmacy.)

S
Secondary coverage
Coverage that pays for some expenses not covered by your primary coverage. Many employers and unions help their retirees with prescription drug expenses by offering secondary coverage when a retiree enrolls in a Medicare Prescription Drug Plan. In most cases, members must show two Member ID cards when filling prescriptions (the card from the primary plan and the card from the plan providing secondary coverage).

Service area
The geographic area served by a specific plan.

Single-source drug
A brand-name drug that is protected by a patent. No other drug company is permitted to manufacture a generic equivalent, so these drugs are usually available from only one manufacturer.

Social Security Administration (SSA)
The Federal agency that determines, among other things, whether you are entitled to and eligible for Medicare benefits.

Special enrollment period (SEP)
Certain times other than the annual election period that a person with special circumstances may enroll in or disenroll from a Medicare Prescription Drug Plan. Examples of such circumstances may include: receiving benefits from both Medicare and Medicaid; changing living situations (such as moving out of state or into a long-term care facility); losing Creditable Coverage from an employer or other plan sponsor; or losing coverage because a plan no longer offers Medicare prescription drug coverage.

Specialty drugs
High-cost drugs that are used to treat complex conditions and that usually require injection and special handling. Plans can include these drugs in a separate "specialty" drug tier if their cost is above an amount specified by Medicare.

State Health Insurance Assistance Program (SHIP)
An organization paid by the Federal government to give free health insurance information and help to people with Medicare. The name for this program may vary from state to state.

State Pharmacy Assistance Program (SPAP)
A state-funded program (separate from Medicaid) that provides financial assistance for prescription drugs to low-income and medically needy senior citizens, and individuals with disabilities. SPAPs are not available in all states.

Step therapy
A plan rule that requires a member to first try one or more specified drugs to treat a particular medical condition before the plan will cover another (usually more expensive) drug that the member's doctor may have prescribed. Covered drugs that require step therapy are indicated in the formulary.

Strength
The amount of an active ingredient contained in a drug.

Summary of Benefits
A document that gives an overview of the benefits available under the plan. The Centers for Medicare & Medicaid Services requires that a Summary of Benefits be included with all enrollment materials and the Welcome Kit so that Medicare beneficiaries can use it to compare plans.

Supplemental Security Income (SSI)
A monthly benefit paid by the Social Security Administration to people with limited income and resources who are disabled, blind, or aged 65 and older. SSI benefits are not the same as Social Security benefits.

T
Therapeutic alternative
A drug that may be given in place of another drug to achieve the same or similar results for most people. Therapeutic alternatives may contain different active ingredients, but they usually provide a similar effect when treating a specific condition.

Therapeutic category
A group of drugs that are similar in their chemical make-up, the way they work, the conditions they treat, or their specific effects.

Therapeutic class
A group of drugs that are used to treat the same condition or symptom.

Tiers
The level of coverage for each drug, for example, "specialty drug tier" or "generic drug tier." Your coinsurance or co-payment will depend on which tier the drug is in. You can find more information about tiers in your Evidence of Coverage and in your formulary. (See drug tiers.)

Total drug costs
The total amount paid for your prescription drugs. This amount includes what you pay and also what your plan pays for your drugs.

Transition supply
A temporary supply of medication that the plan is required to cover for a new member or a member affected by a change to the formulary.

True out-of-pocket costs (TrOOP)
The amount that you (and others on your behalf) have spent out of pocket during the plan year for Part D drugs. Once TrOOP expenses reach a certain amount, you qualify for what most plans refer to as catastrophic coverage.