Your Guide to Medicare Part D

Glossary

Acute condition

A health condition that comes on suddenly and lasts a short time, such as the flu or appendicitis.

Appeal

A complaint you can make if you disagree with a decision by your drug plan to deny a request for coverage.

Biologicals

Medications or treatments made from a live product and used medically to diagnose, prevent, or treat a medical condition. For example, a flu or pneumonia shot or insulin.

Catastrophic coverage

Part D coverage that starts after you have spent a total of $3,850, not including premium costs. Catastrophic coverage usually pays for 95 percent of the total cost of medications.

Chronic condition

A long-standing health condition, such as diabetes or high blood pressure, that often requires ongoing care or medication.

Cost sharing

Drug costs are usually shared between the Medicare beneficiary and the insurance plan. Some plans may require that beneficiaries pay a larger share of more expensive medications.

Deductible

The amount you must pay before Medicare drug coverage starts.

Donut hole

The gap in coverage for prescription drugs that is built into many Medicare Part D plans. In 2007, coverage for drugs will temporarily end after $2,400 ($2,250 in 2006) has been spent between you and your insurer, including your deductible. When out-of-pocket expenses (including your deductible but not your premiums) for drugs reaches $3,850 ($3600 in 2006), or $5,451.25 in total drug costs ($5,100 in 2006) in a calendar year, coverage starts again.

Dual eligibles

Low-income seniors and individuals with disabilities who receive both Medicare and Medicaid benefits.

Enhanced plans

Part D plans that offer increased coverage, such as lower deductibles and no donut hole.

Formulary

A list of prescription medications approved for use and/or coverage by a Part D plan.

Generic drug

A drug that the U.S. Food and Drug Administration (FDA) has determined to be chemically equivalent to a brand-name drug. Hence, generic drugs can be equally effective (though not always) and may substitute for their brand-name equivalent.

Grievance

A specific complaint about the care or service provided by your plan.

Medicaid

A joint federal and state program that helps with medical costs for some people with low incomes and limited financial resources.  Medicaid programs vary from state to state.

Medicaid-excludable drugs

Medications not covered by the government Medicaid program. These include the following: cosmetics; drugs used to treat anorexia or problems with weight, fertility, coughs and colds, and smoking; barbiturates; and benzodiazepines. Also excluded are prescription vitamins (except prenatal vitamins), mineral products (except fluoride preparations), and OTC medications.

Medicare beneficiary

Someone who is eligible to receive Medicare (the government health insurance program for people age 65 or older) people with certain disabilities, and people of all ages with permanent kidney failure requiring dialysis or kidney transplant.

Medicare Part A

The Medicare program that covers costs while you are in the hospital.

Medicare Part B

The Medicare program that covers the cost of seeing a physician or other health professional and outpatient services.

Medicare Part C (also called Medicare Advantage)

The Medicare program that combines coverage for hospitalization as well as for seeing health professionals.

Medicare Part D

The Medicare program that provides coverage for prescription drugs.

Medigap policy (also called Medicare Supplement insurance)

An insurance policy that is purchased from a private company and covers “gaps” and supplements Medicare benefits.

Network provider

A list of preferred doctors, hospitals, pharmacies or chains of pharmacies, with which an insurance plan has negotiated lower prices. Some plans may require you to use a network provider to get the full benefits of the plan.

Out-of-pocket expenses or costs

Healthcare costs not covered by Medicare or other insurance.

Over-the-counter (OTC) medications

Medications that you can purchase without a prescription.

Pre-authorization (also called prior authorization)

Medical justification to get coverage for a specific drug that is not on the plan’s formulary.

Pre-existing condition

A health condition or problem that you had before you enrolled in Part D or other insurance program. Premium The amount you pay each month for insurance coverage.

Prescription drug

A medication that requires a prescription from your physician.

Standard plan (Part D)

The basic plan, which in 2007 includes a $250 deductible and gap in coverage (donut hole) after a total of $2,400 ($2,250 in 2006) has been spent between you and your insurer, including your deductible. Coverage begins again when you have spent a total of $3,850 ($3600 in 2006) in total drug costs in a calendar year, not including premium costs.

Step therapy (also called “fail first”)

A process in which you must start on the least expensive drug and move up until you find a drug that works well for you.

Therapeutic substitution

If a plan does not cover the drug your doctor prescribed, a substitution will be provided. Your physician should approve any therapeutic substitution.