A list of Medicare terms and acronyms, and their definitions, is provided below.
A - D | E - H | I - P | Q - Z
Annual Election Period (AEP) October 15th - December 7th of each year:
This is for anyone wishing to join a Medicare Advantage or Prescription Drug Plan or switch to a different plan. Your coverage will begin on January 1st of the following year.
The fourth and last phase of Medicare Part D coverage following the Coverage Gap. In this phase, all plan members pay $3.30 for generics, and $8.25 for brand name medications—or 5% of the medication's retail cost, whichever is higher.
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.
The amount you pay out-of-pocket for a doctor's visit or a prescription. A copayment is usually a set amount. For example, your copayment could be $10 or $20 for a doctor's visit or prescription.
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 $3,700.00 (not counting your plan premium payments). While in the Coverage Gap phase you are responsible for paying 40% of the plan's cost for covered brand name drugs and 51% of the plan's cost for covered generic drugs until you have paid $4,950.00 in true out-of-pocket costs.
A specific dollar amount you may be required to pay out of pocket before your plan begins to cover medical services and/or your prescriptions. If your Part D coverage includes a deductible, this would be considered the first phase of your Part D coverage. Not all plans have a yearly deductible.
Drugs listed on a formulary may be organized into drug tiers or groups of different types of drugs. Each tier represents a different cost category. The cost can be either a fixed amount called a copay or a percentage of the cost called coinsurance. The lowest tier generally offers generic drugs and has the least expensive copay.
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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.
Covered services that are 1) furnished by a provider qualified to furnish emergency services; and 2) needed to evaluate or stabilize an emergency medical condition.
Explanation of Benefits (EOB):
A statement you receive when you use your Medicare Advantage Part C Medical or Medicare Part D Prescription Drug benefits. Your Part D 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 $3,700.00. The EOB also shows your year-to-date True Out-Of-Pocket costs (sometimes referred to as TrOOP). This amount counts towards reaching the Catastrophic Coverage Phase. Your Part C EOB shows costs for the medical services you receive such as doctor office visits, outpatient services such as lab tests and physical therapy, and preventive services such as mammograms and prostrate cancer screenings.
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.
A formulary is a list of the drugs covered by your health plan. You can request a copy of the formulary by calling the customer service department of your plan, or you may view an online version on your plan's website.
A prescription drug that has the same active-ingredient formula as a brand name drug. Generic drugs usually cost less than brand name drugs and are rated by the Food and Drug Administration (FDA) to be as safe and effective as brand name drugs.
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.
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The second phase of Medicare Part D coverage that, depending on the plan, starts after you meet your yearly deductible for Part D (if your plan has a deductible).
Initial Coverage Election Period (ICEP):
The period that begins three (3) months before the month of your Medicare eligibility and ends three (3) 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 twenty-fifth (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.
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.
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 Advantage Disenrollment Period (MADP) January 1st - Feb 14th:
During this period anyone already enrolled in a Medicare Advantage Plan can disenroll from their plan and return to Original Medicare. You will then have a special election period (SEP) in which to choose a new Prescription Drug Plan (PDP), if you want one.
Medicare Part A (Hospital Insurance):
Helps cover your inpatient care in hospitals. Part A also helps cover skilled nursing facility, hospice, and home health care if you meet certain conditions.
Medicare Part B (Medical Insurance):
Helps cover medically-necessary services like doctors' services and outpatient care. Part B also helps cover some preventive services to help maintain your health and to keep certain illnesses from getting worse.
Medicare Part C (Medicare Advantage Plans):
Medicare Part C is another way to get your Medicare benefits. It combines Part A, Part B, and, sometimes, Part D (prescription drug) coverage. Medicare Advantage Plans are managed by private insurance companies approved by Medicare. These plans must cover medically-necessary services. However, plans can charge different copayments, coinsurance, deductibles and/or premiums for these services.
Medicare Part D (Medicare Prescription Drug Coverage):
Medicare Part D helps cover your prescription drugs. This coverage may help lower your prescription drug costs and help protect against higher costs in the future.
A network pharmacy is a contracted pharmacy where members of our Plan can receive covered prescription drug benefits. Your prescriptions are covered only if they are filled at one of our network pharmacies.
Original Medicare Plan:
The Original Medicare Plan has two (2) parts: Part A (Hospital Insurance) and Part B (Medical Insurance). It is a fee-for-service health plan. You must pay the deductible. Medicare pays its share of the Medicare approved amount, and you pay your share (coinsurance and deductibles).
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. Members pay more for services provided by out-of-network providers.
The periodic payment (usually monthly) to Medicare, an insurance company, and/or a health care plan for health or prescription drug coverage.
A plan requirement to get approval from the plan before you fill a specific prescription or receive a specific medical service. If you don’t get approval, the plan may not cover the drug or medical service.
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.
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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.
Your Primary Care Physician's (PCP) approval for you to see a certain plan specialist or to receive certain covered services from other plan providers prior to receiving the service. Optima Medicare HMO does not require referrals.
Special Election Period (SEP):
A specific time when members can change their health or drug plans or return to Original Medicare. Times when you have an SEP include, among others, moving out of the plan's service area, moving into a nursing home, or if you get "Extra Help" with your Part D prescription drugs.
Specialty Drug Coinsurance:
The percentage of the cost you pay for specialty prescriptions, such as injectable drugs and biopharmaceuticals.
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 assistance to people to pay 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.
A plan requirement to first try a specific drug for treatment of a medical condition before a different drug will be covered for that same condition.
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 $4,950.00, you become eligible for the Catastrophic Coverage phase of Part D coverage, which allows you to get medicines for a much lower cost.
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