Medicare Glossary M-P

Prescription Drug Plan Terms and What They Mean

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Medicaid (or Medical Assistance):

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. See the Evidence of Coverage (EOC) for information about how to contact Medicaid in your state.


The Federal health insurance program for people 65 years of age or older, some people under age 65 with certain disabilities, and people with End-Stage Renal Disease (generally those with permanent kidney failure who need dialysis or a kidney transplant).People can get their Medicare health coverage through Original Medicare or a Medicare Advantage Plan.

Medicare Advantage (MA) Plan:

Sometimes called Medicare Part C. A plan offered by a private company that contracts with Medicare to provide you with all your Medicare Part A and Part B benefits. A Medicare Advantage Plan can be a Health Maintenance Organization (HMO), a Preferred Provider Organization (PPO), a Private Fee-for-Service (PFFS) plan or a Medicare Medical Savings Account (MSA) plan. If you are enrolled in a Medicare Advantage Plan, Medicare services are covered through the plan and are not paid for under Original Medicare. In most cases, Medicare Advantage Plans also offer Medicare Part D (prescription drug coverage). These plans are called Medicare Advantage Plans with Prescription Drug Coverage or MA-PD plans. Everyone who has Medicare Part A and Part B is eligible to join any Medicare health plan that is offered in their area, except people with End-Stage Renal Disease (certain exceptions apply).

Medicare Coverage Gap Discount Program:

A program that provides discounts on most covered Part D generic and brand-name drugs to Part D members who have reached the Coverage Gap and who are not already receiving “Extra Help.” Discounts are based on agreements between the Federal government and certain drug manufacturers. For this reason, most, but not all, brand name drugs are discounted.

Medicare Prescription Drug Coverage (Medicare Part D):

Insurance to help pay for outpatient prescription drugs, vaccines, biologicals and some supplies not covered by Medicare Part A or Part B.

Member (Member of our Plan, or “Plan Member”):

A person with Medicare who is eligible to get covered services, who has enrolled in our plan and whose enrollment has been confirmed by the Centers for Medicare & Medicaid Services (CMS).

Network Pharmacy:

A pharmacy where members of our plan can get their prescription drug benefits. We call them "network pharmacies" because they contract with our plan. In most cases, your prescriptions are covered only if they are filled at one of our network pharmacies.

Original Medicare ("Traditional Medicare" or "Fee-for-Service" Medicare):

Original Medicare is offered by the government, and not a private health plan like Medicare Advantage Plans and Part D prescription drug plans. Under Original Medicare, Medicare services are covered by paying doctors, hospitals, and other health care providers payment amounts established by Congress. You can see any doctor, hospital, or other health care provider that accepts Medicare. You must pay the deductible. Medicare pays its share of the Medicare-approved amount, and you pay your share. Original Medicare has two parts: Part A (Hospital Insurance) and Part B (Medical Insurance) and is available everywhere in the United States.

Out-of-Network Pharmacy:

A pharmacy that doesn’t have a contract with our plan to coordinate or provide covered drugs to members of our plan. As explained in the Evidence of Coverage, most drugs you get from out-of-network pharmacies are not covered by our plan unless certain conditions apply.

Out-of-Pocket Costs:

See the definition for “cost-sharing”. A member’s cost-sharing requirement to pay for a portion of drugs received is also referred to as the member’s “out-of-pocket” cost requirement.

Over-the-Counter Medicines (OTC Medicines):

Medicines that do not require a prescription.

Part D:

The voluntary Medicare Prescription Drug Benefit Program. (For ease of reference, we will refer to the prescription drug benefit program as Part D.)

Part D Late Enrollment Penalty:

An amount added to your monthly premium for Medicare drug coverage if you go without creditable coverage (coverage that is expected to pay, on average, at least as much as standard Medicare prescription drug coverage) for a continuous period of 63 days or more. You pay this higher amount as long as you have a Medicare prescription drug plan. There are some exceptions. For example, if you receive Extra Help from Medicare to pay your prescription drug plan costs, the late enrollment penalty rules do not apply to you. If you receive “Extra Help,” you do not pay a late enrollment penalty.

Preferred Cost-Sharing:

Preferred cost-sharing means lower cost-sharing for certain covered Part D drugs at certain network pharmacies.

Preferred Network Pharmacy:

A preferred pharmacy is one that contracts with a Medicare Part D plan allowing members of the plan to enjoy preferred cost-sharing (the lowest copays and coinsurance) when filling prescriptions using their plan benefit during the Initial Coverage stage.


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

Prescription Drug Plan (PDP):

Insurance to help pay for outpatient prescription drugs, vaccines, biologicals and some supplies not covered by Medicare Part A or Part B.

Prior Authorization:

A prior authorization is a requirement that your doctor or other prescriber obtain approval from your plan to prescribe a specific medication for you. Covered drugs that need prior authorization are marked in the formulary.

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