Medical Terminology Definitions

Annual Deductible

The amount you must pay for your prescriptions or other medical care, before your Medicare drug plan or Medicare Health Plan begins to pay. These amounts can change every year.

If “Under Review” appears, it means that the prescription drug coverage is still being discussed by Medicare and the plan.

Any Willing Doctor

A doctor, hospital, or other health care provider that agrees to accept the plan’s terms and conditions related to payment and that meets other requirements for coverage.

Approval Status

If Medicare has approved the coverage and costs offered by the company for the year 2009. “As submitted by organization” means the company has a current contract with Medicare, but Medicare is still discussing the coverage and costs offered by the company for 2009.

Assignment

In Original Medicare, this means a doctor or supplier agrees to accept the Medicare-approved amount as full payment. If you are in Original Medicare, it can save you money if your doctor accepts assignment. You still pay your share of the cost of the doctor’s visit.

Benefit Period

A “benefit period” begins the day you go to a hospital or skilled nursing facility (SNF). The benefit period ends when you haven’t received any hospital care (or skilled care in a SNF) for 60 days in a row. If you go into a hospital or a SNF after one benefit period has ended, a new benefit period begins. You must pay the inpatient hospital deductible for each benefit period. There is no limit to the number of benefit periods.

Catastrophic Coverage

Once your total drug costs reach the $6,153.75 maximum, you pay a small coinsurance (like 5%) or a small copayment for covered drug costs until the end of the calendar year.

Cobrand

Refers to the partner relationships established between Medicare Prescription Drug Plans and other organizations. Some drug plans enter into agreements with other organizations to help market their drug plans. These relationships are between the drug plan and the partner organizations and are outside of the contract with Medicare.

Coinsurance

The amount you may be required to pay for services after you pay any plan deductibles. In Original Medicare, this is a percentage (like 20%) of the Medicare approved amount.

You have to pay this amount after you pay the deductible for Part A and/or Part B. In a Medicare Prescription Drug Plan or Medicare Health Plan, the coinsurance will vary depending on how much you have spent.

Company Name

Name of company that contracts with Medicare to offer a Medicare Prescription Drug Plan or a Medicare Health Plan. (The number next to the name is for Medicare’s use only.)

Copayment

In some Medicare health and prescription drug plans, the amount you pay for each medical service, like a doctor’s visit, or prescription. A copayment is usually a set amount you pay. For example, this could be $10 or $20 for a doctor’s visit or prescription. Copayments are also used for some hospital outpatient services in Original Medicare.

Cost Sharing

The amount you pay for health care and/or prescriptions. This amount can include copayments, coinsurance, and/or deductibles.

Coverage Gap

Medicare drug plans may have a “coverage gap,” which is sometimes called the “donut hole.” A coverage gap means that after you and your plan have spent a certain amount of money for covered drugs (no more than $2,700), you have to pay out-of-pocket all costs for your drugs while you are in the “gap.” The most you have to pay out-of-pocket in the coverage gap is $4,350 . This amount doesn’t include your plan’s monthly premium that you must continue to pay even while you are in the coverage gap. Once you’ve reached your plan’s out-of-pocket limit, you will have “catastrophic coverage.” This means that you only pay a coinsurance amount (like 5% of the drug cost) or a copayment (like $2.40 or $6.00 for each prescription) for the rest of the calendar year.

Note: If you get extra help paying your drug costs, you won’t have a coverage gap. However, you will probably have to pay a small copayment or coinsurance amount.

Deductible

The amount you must pay for health care or prescriptions, before Original Medicare, your Medicare drug plan, your Medicare Health Plan, or your other insurance begins to pay. For example, in Original Medicare, you pay a new deductible for each benefit period for Part A, and each year for Part B. These amounts can change every year.

Demonstration/Pilot Program

Special projects that test improvements in Medicare coverage, payment, and quality of care. Some follow Medicare Advantage rules, but others don’t. Demonstrations are usually for a specific group of people and/or are offered only in specific areas. There are also pilot programs for people with multiple chronic illnesses designed to reduce health risks, improve quality of life, and provide savings.

Disenroll

Ending your health care and/or prescription drug coverage with a health plan or drug plan.

Drug Plan Summary Score

This score summarizes the drug plan’s quality and performance.

How is the summary score determined?
This score is a summary of the drug plan’s performance on 19 different topics in four categories:

• Drug Plan Customer Service. Includes how well the drug plan handles calls and how well the drug plan makes decisions about member appeals.
• Member Complaints and Staying with Drug Plan. Includes how often members have made complaints against the drug plan and how often members choose to stay with the drug plan from one year to the next.
• Member Experience with Drug Plan. Combines member satisfaction data collected by Medicare’s annual survey.
• Drug Pricing and Patient Safety. Includes how well the drug plan is doing with pricing of prescriptions and providing accurate pricing information on the Medicare website, and how often the drug plan’s members got certain prescriptions that have a high risk of side effects in patients 65 and older.

Why is the summary score important?

The summary score makes it easy for you to compare drug plans based on quality and performance.

You can look up the drug plan’s score in each of the four categories that make up the summary score. You can also look up the drug plan’s scores in the 19 individual topics that make up the score in those four categories.

Employer or Union Retiree Plans

Health plans that give health and/or drug coverage to employees, former employees, and their families. These plans are offered to people through their (or a spouse’s) current or former employer or employee organization.

Enhanced Alternative Plan

Enhanced Alternative Plans can offer a more comprehensive level of coverage, with lower cost-sharing and/or additional coverage of certain drugs excluded from the standard level of coverage and basic alternative coverage. Premiums may be higher for these plans, but they offer more coverage.

Estimated Annual Cost

When using this tool, this is an estimate of the average amount you might expect to spend each year for your health and/or drug coverage. The estimates include:

• Plan benefits (coverage);
• Costs for premiums, copayments, deductibles, coinsurance, and;
• Costs not covered by your insurance.

Your out-of-pocket costs are based on actual health and/or drug coverage use by people with Medicare, and they may differ depending on your age and health status. Also, if you have limited income and resources, your expenses may be lower.

Favorites

Your “favorites” are plans that you’re interested in. When you’re trying to decide which plan to join, you can create a list of plans you’re interested in so that you can return to the Medicare Prescription Drug Plan Finder later and still be able to see those plans. To add or remove plans from your list of “favorites”, click the “Add” or “Remove” buttons on the right side of screen under the “favorites” column.

Formulary

A list of drugs covered by a plan

Full Dual Eligible

You get the full amount of extra help, because you’re Medicaid-eligible.

Full Subsidy Eligible

You get the full amount of extra help, because you either have MSP, SSI, or you applied with Social Security.

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. The Food and Drug Administration (FDA) rates these drugs to be as safe and effective as brand-name drugs.

Guaranteed Issue Rights

Rights you have in certain situations when insurance companies are required by law to sell or offer you a Medigap policy. In these situations, an insurance company can’t deny you a policy, or place conditions on a policy, such as exclusions for pre-existing conditions, and can’t charge you more for a policy because of past or present health problems.

Health Maintenance Organization (HMO)

A type of Medicare Health Plan that is available in most areas of the country. Plans must cover all Medicare Part A and Part B health care. Some HMOs cover extra benefits, like extra days in the hospital. In most HMOs, you can only go to doctors, specialists, or hospitals on the plan’s list except in an emergency. Your costs may be lower than in Original Medicare.

High-Deductible Medigap Policy

A type of Medigap policy that has a high deductible but a lower premium. You must pay the deductible before the Medigap policy pays anything. The deductible amount can change each year.

If I Qualify for Extra Help, will My Full Premium be Covered?

When using the Medicare Prescription Drug Plan Finder, if $0 appears under the premium column, it means that the extra help you are receiving will cover the premium for that plan. If an amount of $1 or greater appears under the premium column, it means you will have to pay part of the premium because the extra help won’t cover all of it. You would be responsible for paying this monthly amount if you choose to enroll in that plan.

Independent Reviewer

An independent reviewer, also known as an independent review entity (IRE), is an outside organization that has a contract with Medicare. If you appeal a decision about your coverage or if your drug plan doesn’t make a timely appeals decision, the IRE may review your case. The IRE has no connection to the drug plan. Refer to your drug plan’s explanation of coverage for more details about the appeals process. Click here for more information on Medicare appeals.

Initial Coverage Limit

Once you have met your yearly deductible, and until you reach the $2700 maximum, you pay a copayment (a set amount you pay) or coinsurance (a percentage of the total cost) for each covered drug.

In-Network

Doctors, hospitals, pharmacies, and other healthcare providers that have agreed to provide members of a certain insurance plan with services and supplies at a discounted price. In some insurance plans, your care is only covered if you get it from in-network doctors, hospitals, pharmacies, and other healthcare providers.

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.

Medically Necessary

Services or supplies that are needed for the diagnosis or treatment of your medical condition, meet the standards of good medical practice in the local area, and aren’t mainly for the convenience of you or your doctor.

Medicare Advantage Plan

Health plan options that are approved by Medicare but run by private companies. They are part of the Medicare Program.

With Medicare Advantage Plans:

• You generally get all your Medicare-covered health care through that plan.
• Coverage can include prescription drug coverage.
• You may get extra benefits, such as coverage for vision, hearing, dental, and/or health and wellness programs.
• You may have lower out-of-pocket costs than Original Medicare.
• You may have to use the plan’s doctors and hospitals to get services.

You don’t need to buy a Medigap policy.

Medicare Cost Plan

A Medicare Cost Plan is a type of HMO. These plans may work in much the same way, and have some of the same rules, as Medicare Advantage Plans. In a Medicare Cost Plan, if you go to a non-network provider, the services are covered under Original Medicare. You would pay the Medicare Part A and Part B coinsurance and deductibles.

Medicare Health Plan

Medicare Health Plans offer Part A and Part B coverage all in one drug plan and many also include Medicare Prescription Drug coverage.

Medicare Medical Savings Account (MSA) Plan

A type of Medicare Advantage Plan. Medical Savings Account (MSA) Plans have two parts. The first part is a high-deductible Medicare Advantage MSA Health Plan. This health plan won’t begin to pay covered costs until you have met the annual deductible, which varies by plan. The second part is a Medical Savings Account into which Medicare deposits money that you may use to pay health care costs.

Medicare Prescription Drug Plan

A Medicare Prescription Drug Plan is a stand-alone drug plan that adds drug coverage to Original Medicare, some Medicare Private Fee-for-Service plans, some Medicare Cost plans, and Medicare Medical Savings Account plans. Medicare Advantage Plans may also offer prescription drug coverage that must follow the same rules as Medicare Prescription Drug Plans.

Medicare Savings Program

Medicaid programs that help pay some or all Medicare premiums and deductibles.

Medicare SELECT

A type of Medigap policy that may require you to use hospitals and, in some cases, doctors within its network to be eligible for full benefits.

Medicare Special Needs Plan

A special type of Medicare Advantage Plan that provides all Medicare Part A and Part B health care and services to people who can benefit the most from things like special care for chronic illnesses, care management of multiple diseases, and focused care management. These plans may limit membership to people.

• in certain institutions (like a nursing home),
• eligible for both Medicare and Medicaid, or
• with certain chronic or disabling conditions.

Medicare-approved Amount

In Original Medicare, this is the amount a doctor or supplier can be paid, including what Medicare pays and any deductible, coinsurance, or copayment that you pay. It may be less than the actual amount charged by a doctor or supplier.

Medigap Policy

Medicare supplement insurance sold by private insurance companies to fill “gaps” in Original Medicare coverage. Except in Massachusetts, Minnesota, and Wisconsin, there are up to 12 standardized Medigap policies labeled Medigap Plan A through Plan L. Medigap policies only work with Original Medicare.

Monthly Premium

The periodic payment to Medicare, an insurance company, or a health care plan for health care or prescription drug coverage. In a few cases, a note will say “Under Review” instead of a premium amount. This means Medicare and the company are still discussing the amount.

No Subsidy Eligible

You don’t qualify for extra help.

Non-preferred Pharmacy

A network pharmacy that offers covered drugs to plan members at higher out-of-pocket costs than what the member would pay at a preferred network pharmacy.

Open Enrollment Period (Medigap)

A one-time only six month period when you can buy any Medigap policy you want that is sold in your state. It starts in the first month that you are covered under Medicare Part B and you are age 65 or older (or under age 65 in some states). During this period, you can’t be denied coverage or charged more due to past or present health problems.

Optional Supplemental Benefits

Services not covered by Medicare that enrollees can choose to buy or reject. Enrollees that choose such benefits pay for them directly, usually in the form of premiums and/or cost sharing. Those services can be grouped or offered individually and can be different for each Medicare Health Plan offered.

Original Medicare

A fee-for-service health plan that lets you go to any doctor, hospital, or other health care supplier who accepts Medicare and is accepting new Medicare patients. You must pay the deductible. Medicare pays its share of the Medicare-approved amount, and you pay your share (coinsurance). In some cases you may be charged more than the Medicare approved amount. Original Medicare has two parts: Part A (Hospital Insurance) and Part B (Medical Insurance).

Out-of-Network

Generally, an out-of-network benefit provides you with the option to access plan services outside of the plan’s contracted network of providers. In some cases, your out-of-pocket costs may be higher for an out-of-network benefit.

Out-of-Pocket Costs

Health care costs that you must pay on your own because they are not covered by Medicare or other insurance.

PACE (Programs of All-inclusive Care for the Elderly)

PACE combines medical, social, and long-term care services for frail people who live and get health care in the community. They are a joint Medicare and Medicaid option in some states. To be eligible, you must:

• Be 55 years old, or older,
• Live in the service area of the PACE program,
• Be certified as eligible for nursing home care by the appropriate state agency , and
• Be able to live safely in the community.

The goal of PACE is to help people stay independent and live in their community as long as possible, while getting high quality care they need.

Part A (Hospital Insurance)

The part of Medicare that pays for inpatient hospital stays, care in a skilled nursing facility, hospice care and some home health care.

Part B (Medical Insurance)

Medicare medical insurance that helps pay for doctors’ services, outpatient hospital care, durable medical equipment, and some medical services that aren’t covered by Part A.

Partial Subsidy Eligible

You get a partial amount of extra help.

Plan Members Who Qualify For Extra Help

These drug plan members qualify to get extra help from Medicare paying their prescription drug coverage costs. This extra help is also known as the “Low-Income Subsidy.” People who qualify for this program get help paying their Medicare drug plan’s monthly premiums, annual deductible, and prescription co-payments.

Plan Name

The name of the plan offered by the company that contracts with Medicare.

Point of Service (POS)

An HMO option that lets you use doctors and hospitals outside the plan for an additional cost.

Pre-existing Conditions

A health problem you had before the date that a new insurance policy starts.

Preferred Pharmacy

A network pharmacy that offers covered drugs to plan members at lower out-of-pocket costs than what the member would pay at a non-preferred network pharmacy.

Preferred Provider Organization (PPO)

A type of Medicare Advantage Plan available in a local or regional area in which you pay less if you use doctors, hospitals, and providers that belong to the network. You can use doctors, hospitals, and providers outside of the network for an additional cost.

Premium

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

Pricing Method

Insurance companies set their own premiums for Medigap (Medicare Supplement Insurance) policies. How they set the price affects how much you pay now and in the future. Medigap policies can be prices or “rated” in three ways:

1. Community-rated (or “no-age-rated”)
2. Issue-age-rated
3. Attained-age-rated

Prior Authorization

Prior authorization means that you will need prior approval from an insurance plan before you fill your prescription. If a drug has prior authorization, you will need to work with the plan and your doctor to obtain an exception. For prior authorization information, you can access the plan’s website to identify the specific requirements for that plan. Many prior authorization requirements can be resolved at the point of sale and do not require any additional information from your physician. Knowing what the prior authorizations are before going to your doctor’s office may save you time at the pharmacy counter.

Private Fee-for-Service Plan

A type of Medicare Health Plan in which you may go to any Medicare-approved doctor or hospital that accepts the plan’s payment. The insurance plan, rather than the Medicare Program, decides how much it will pay and what you pay for the services you get. You may pay more or less for Medicare-covered benefits. You may have extra benefits Original Medicare doesn’t cover.

Qualified Medicare Beneficiary (QMB)

A Medicaid program for people with Medicare who need help in paying for Medicare services. The person with Medicare must have Medicare Part A and limited income and resources. For those who qualify, the Medicaid program pays Medicare Part A and Part B premiums, and Medicare deductibles and coinsurance amounts for Medicare services.

Quantity Limitation

For safety and cost reasons, plans may limit the quantity of drugs that they cover over a certain period of time. If the drug has a quantity limit restriction, you should contact the plan for more details. If you take one pill per day and the drug has a 30 day/month quantity limit, the impact will be minimal (i.e., you may not be able to refill the prescription until a few days before running out of pills). If you currently take 2 pills per day and the quantity limit is 30 pills per month, you would need to work with the plan to get authorization for the higher quantity.

Referral

A written order from your primary care doctor for you to see a specialist or get certain services. In many HMOs, you need to get a referral before you can get care from anyone except your primary care doctor. If you don’t get a referral first, the plan may not pay for your care.

Service Area

The area where a health plan accepts members. For plans that require you to use their doctors and hospitals, it is also the area where services are provided. The plan may disenroll you if you move out of the plan’s service area.

Skilled Nursing Facility

A nursing facility with the staff and equipment to give skilled nursing care and/or skilled rehabilitation services and other related health services.

Specified Low – Income Medicare Beneficiary (SLMB)

A Medicaid program that pays for Medicare Part B premiums for individuals who have Medicare Part A, a low monthly income, and limited resources.

Stars

Stars for each plan show how well the plan performs in that particular category. Star ratings range from 1 star to 5 stars, where a rating of 1 star means “poor” quality and 5 stars means “excellent” quality.

Step Therapy

In some cases, plans require you to first try one drug to treat your medical condition before they will cover another drug for that condition. For example, if Drug A and Drug B both treat your medical condition, a plan may require your doctor to prescribe Drug A first. If Drug A does not work for you, then the plan will cover Drug B. If a drug has step therapy restrictions, you will need to work with the plan and your doctor to obtain an exception.

Subsidy Status Unknown

Medicare doesn’t have any information about your extra help status.

Summary Score for Health Plan Quality

How Well is the Health Plan Doing?
This category has a single rating that summarizes how well the health plan is doing across all areas of health plan quality and performance reported on this website.

The summary score is calculated by combining the health plan’s ratings in the following categories:

• Staying Healthy: Screenings, Tests and Vaccines. This category covers how well each health plan works to detect and prevent illness.
• Getting Timely Care from Doctors and Specialists. This category shows how easily people in each health plan are able to get the care they need from primary care doctors and specialists.
• Managing Chronic (Long-Lasting) Conditions. This category has information on how well each health plan helps people with chronic or long-lasting health conditions.
• Ratings of Health Plan Responsiveness and Care. This category shows how well each health plan responds when its members need information and care.
• How Well and Quickly Health Plans Handled Appeals. This category provides information on how well and how quickly each health plan handles appeals, and whether the health plan’s decisions are upheld by outside experts.

Why is this summary score important?
This “summary score of health plan quality” provides a quick and easy way for you to compare the overall quality and performance of health plans. You can use the separate ratings to get more details on topics of special interest to you.

Tiers

Drugs on a formulary are often organized into different drug “tiers,” or groups of different drug types. Your cost depends on which drug tier your drug is in.

For example, a plan may form tiers this way:

• Tier 1 – Generic drugs.
• Tier 2 – Preferred brand-name drugs.
• Tier 3- Non-preferred brand name drugs.

Contact the plan to learn more about its specific tier structure.