Medicare prescription drug coverage (Part D) can help you pay for your prescription medications, whether you are enrolling for the first time or are considering changing from one plan to another. Liberty can help you choose the Medicare Prescription Drug Plan that will best serve your needs.

We hope you find the following glossary of Medicare terms helpful.

assets

Property you own that the government may review when you apply for assistance. For help with a Medicare Part D prescription drug plan's costs, the government counts cash or any property that can be turned into cash within 20 days. This includes checking and savings accounts, certificates of deposit, IRAs and 401(k)s, stocks, bonds, and similar items. It does not include your primary home or certain property related to burial expenses. It does include a second home.

benefit

Another name for coverage. See coverage.

brand-name drugs

Prescription drugs that are sold under a trademarked brand name.

catastrophic coverage

A name for the step of a Medicare Part D prescription drug plan in which the plan pays for nearly all your drug expenses until the end of the year, with no upper limit, after your out-of-pocket costs have exceeded $4,350. In this step, you pay only a small share of your drug expenses (approximately five percent).

Centers for Medicare and Medicaid Services (CMS)

The federal agency that runs the Medicare program and works with the states to manage the Medicaid program.

co-insurance

A kind of cost sharing where costs are split on a percentage basis. For example, a plan might pay 75 percent and you would pay 25 percent. See cost sharing.

co-payment

A kind of cost sharing where you pay a pre-set, flat amount for each service. In a Medicare drug plan, for example, you might pay $10 for each prescription you receive and the plan would pay the remaining cost of the drug. See cost sharing.

cost sharing

A term for the way an insurance plan shares its costs with someone. The most common types of cost sharing are co-insurance and co-payments. See co-insurance and co-payments.

coverage

The benefits you receive from an insurance plan. In a Medicare Part D prescription drug plan, the prescription drug costs that are paid by the plan are your benefits, or coverage.

coverage gap

A name for the step in a standard Medicare Part D prescription drug plan in which you pay 100% of your expenses for eligible drugs, until your out-of-pocket drug costs have reached $4,350. Some people call this the "doughnut hole."

creditable coverage

Prescription drug coverage from a retiree or union plan that on average provides coverage at least as good as a standard Medicare Part D prescription drug plan. If you are currently enrolled in a drug plan that gives you prescription drug coverage, your plan will tell you if it meets the Medicare standards for creditable coverage.

deductible

The amount you must pay out-of-pocket before your plan starts to pay. In a standard Medicare drug plan, you must pay the first $295 of your eligible drug expenses for the year as your deductible.

doughnut hole

See coverage gap.

dual eligibles

People with both Medicare and Medicaid.

eligible drugs

Drugs that are covered by a prescription drug plan. In a Medicare drug plan, eligible drugs are listed on the plan's formulary. See formulary.

exclusions

Items that are not covered by an insurance policy. Medicare drug plans have two types of exclusions. The first type is drugs that Medicare has excluded from coverage, such as weight-loss drugs. The second type is drugs that are excluded from a plan's list of covered drugs, or formulary. See eligible drugs and formulary.

formulary

A list of prescription drugs that are covered by a Medicare Part D prescription drug plan.

generic drugs

Prescription drugs covered by the Medicare prescription drug plan that have the same active ingredient formula as a brand name drug. Generic drugs covered by Medicare Part D prescription drug plans 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.

Medicaid

A program that pays for medical assistance for certain individuals and families with low incomes and resources. Medicaid is jointly funded by the federal and state governments to assist states in providing assistance to people who meet certain eligibility criteria.

Medicare Advantage Plans

Health plans offered by private insurance companies that contract with Medicare to provide Medicare coverage. Depending on where you live, Medicare Advantage Plans may be available both with and without Medicare Part D prescription drug plans. You may also hear Medicare Advantage Plans referred to as Medicare Health Plans. The Medicare Advantage Plans used to be called the Medicare+Choice plans.

Medicare

The federal government health insurance program for:

• People age 65 and older
• People with certain disabilities
• People of all ages with End-Stage Renal Disease (permanent kidney failure requiring dialysis or kidney transplant)

Medicare prescription drug coverage

Insurance plans offering prescription drug coverage that meets the standards established by Medicare. Other names for these plans include Medicare Drug Plans, PDPs, or MA-PDs. However, not all private insurance plans offering prescription drug coverage are Medicare Part D prescription drug plans. You'll want to pay close attention to whether a plan is a Medicare Part D prescription drug plan.

Medicare supplement policy

The traditional federal Medicare insurance program doesn't pay the total amount of medical expenses. Expenses that are not covered are called "gaps" in Medicare coverage. Private insurance companies sell insurance policies that fill some of these gaps and pay for some of these expenses. These policies are known as Medicare supplement or "Medigap" policies.

Medigap

See Medicare supplement policy.

medication therapy management

The term used to describe the type of extra help that people with multiple prescriptions, chronic diseases, and high drug costs may receive to help them manage all of their medications. The purpose is to make sure that all of a patient's drugs work well together, he or she understands his or her medications and knows how to manage potential side effects.

network

The group of doctors, hospitals, and pharmacies who have contracts with an insurance plan to provide care to that plan's members. You should use your Medicare Part D prescription drug plan's network of pharmacies to maximize the money you save on your drugs.

out-of-pocket costs

The amounts you pay as your share of your prescription drug costs. Out-of-pocket costs include deductibles, co-insurance, and the amounts you pay in any coverage gap.

In a Medicare Part D prescription drug plan, any amounts you pay that are later reimbursed by someone else (such as an employer's insurance plan) do not count as part of your out-of-pocket costs. The out-of-pocket costs you pay for which you are not reimbursed are called your "true out-of-pocket costs" or "TROOP."

When your true out-of-pocket costs have exceeded $4,350, you are eligible for the additional coverage. See catastrophic coverage.

premium

The money you pay to have an insurance plan. In a Medicare Part D prescription drug plan, this is usually a monthly fee.