Prescription Drug Plan Terms and What They Mean
Income-Related Monthly Adjustment Amount (IRMAA):
If your income is above a certain limit, you will pay an income-related monthly adjustment amount in addition to your plan premium. For example, for 2017 and 2018 tax returns, individuals with income greater than $85,000 and married couples with income greater than $170,000 must pay a higher Medicare Part B (medical insurance) and Medicare prescription drug coverage premium amount. This additional amount is called the income-related monthly adjustment amount. Less than 5% of people with Medicare are affected, so most people will not pay a higher premium.
Initial Coverage Limit:
The maximum limit of coverage under the Initial Coverage stage. This amount is $3,750 (in 2018) and $3,820 (in 2019).
Initial Coverage Stage:
This is the stage after you have met your deductible and before your total drug expenses have reached $3,750 (in 2018) and $3,820 (in 2019), including amounts you’ve paid and what our plan has paid on your behalf.
Initial Enrollment Period (IEP):
Your Medicare Part D IEP is a 7-month period that begins 3 months before the month you turn 65. It continues through the month you turn 65 and ends 3 months after the month you turn 65. For example, if your birthday falls on July 2, your 7-month IEP spans the 7-month period from April through October.
Note: There is an IEP exception: If your birthday falls on the first of any month, your 7-month IEP begins and ends one month sooner. For example, if your birthday is July 1, your 7-month IEP is the same as if you were born in June: beginning in March and ending in September.
Lawfully Present Individual:
Individuals who are lawfully present in the United States are eligible for Medicare Part D benefits. These individuals include those with a qualified non-citizen immigration status without a waiting period, or individuals with humanitarian status/circumstances, or have valid non-immigrant visas.
List of Covered Drugs (Formulary or “Drug List”):
Drugs listed on a plan’s formulary are considered “covered drugs”. A formulary is a list of the drugs a Part D plan covers. Many Medicare prescription drug plans break drugs into different tiers within the formularies. Drugs in different tiers have different cost-sharing.
Low Income Subsidy (LIS):
See “Extra Help.”
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