Medicare Glossary and Acronyms

Prescription Drug Plan Terms and What They Mean

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Annual Enrollment Period (AEP):

A set time each fall when members can change their health or drugs plans or switch to Original Medicare. The Annual Enrollment Period is from October 15 until December 7.


An action you take if you disagree with our decision to deny a request for coverage of prescription drugs or payment for drugs you already received. For example, you may ask for an Appeal if we don’t pay for a drug you think you should be covered. Your Evidence of Coverage (EOC) explains Appeals, including the process involved in making an Appeal.

Automatic Bank Withdrawal:

A method for paying your monthly premium by allowing SilverScript to automatically withdraw money from your bank account. Withdrawals take place between the 8th and 10th of each month. If you decide to switch to Automatic Bank Withdrawal or move from Automatic Bank Withdrawal to another automatic payment method, it could take up to three months for it to take effect. Until such time that it does take effect, you are responsible for paying any premium invoices you receive in the mail.

Brand Name Drug:

A prescription drug that is manufactured and sold by the pharmaceutical company that originally researched and developed the drug. A Brand name drug and its generic equivalent have the same active-ingredient formula. However, generic drugs are manufactured and sold by other drug manufacturers and are generally not available until after the patent on the brand name drug has expired.

Catastrophic Coverage:

The stage in the Part D drug benefit where you pay a low copayment or coinsurance for your drugs after you or other qualified parties on your behalf have spent $6,350 in 2020 on covered drugs during the plan year.

Centers for Medicare & Medicaid Services (CMS):

CMS is the federal agency that administers Medicare, Medicaid and several other health-related programs. CMS sets standards for Medicare Part D insurance plans.


An amount you may be required to pay as your share of the cost for prescription drugs after you pay any deductibles. Coinsurance is a percentage of the cost (for example: 20%).


An amount you may be required to pay as your share of the cost for a prescription drug after you pay for any deductible. A copay is usually a set dollar amount (for example: a $10 copay).


Cost-sharing refers to amounts that a member has to pay when drugs are received. (This is in addition to the plan’s monthly premium.) Cost-sharing includes any combination of the following three types of payments: (1) any deductible amount a plan may impose before drugs are covered; (2) any fixed "copayment" amount that a plan requires when a specific drug is received; or (3) any "coinsurance" amount, a percentage of the total amount paid for a drug, that a plan requires when a specific drug is received.

Cost-Sharing Tier:

Every drug on the list of covered drugs is in one of five cost-sharing tiers. In general, the higher the cost-sharing tier, the higher your cost for the drug.

Coverage Determination (or Coverage Decision):

A decision about whether a drug prescribed for you is covered by the plan and the amount, if any, you are required to pay for the prescription. In general, if you bring your prescription to a pharmacy and the pharmacy tells you the prescription isn’t covered under your plan, that isn’t a Coverage Determination. You, your prescriber or other physician, or your appointed representative need to call or write to your plan to ask for a formal decision about the coverage. Coverage Determinations are also called “Coverage Decisions.” The Evidence of Coverage (EOC) explains how to ask us for a Coverage Decision.

Covered Drugs:

The term we use to mean all of the prescription drugs covered by our plan.

Coverage Gap (Donut Hole):

A Medicare prescription drug coverage stage following the Initial Coverage stage. The Coverage Gap begins after the total annual drug costs paid by you and your plan have reached $4,020 in 2020 not counting your premium payments. You leave the Coverage Gap when your True Out-Of-Pocket (TrOOP) costs reach $6,350 in 2020, not counting premiums. Note: these dollar limits are subject to change each year.

Coverage Gap Discount:

If you reach the Coverage Gap (Donut Hole), and do not get Extra Help from Medicare or help to pay your prescription costs from a state program, your plan will pick up 75% of the cost of generic drugs and 75% of the cost of brand name drugs in 2020 for as long as you remain in the Coverage Gap. If you do receive Extra Help from Medicare or help to pay your prescription costs from your state, your copays for generic and brand name drugs may be different.

Creditable Prescription Drug Coverage:

Prescription drug coverage (for example, from an employer or union) that is expected to pay, on average, at least as much as Medicare’s standard prescription drug coverage. People who have this kind of coverage when they become eligible for Medicare can generally keep that coverage without the risk of paying a penalty in the future, if they decide to enroll in Medicare prescription drug coverage later.

Customer Care:

A department within our plan responsible for answering your questions about your membership, benefits, Grievances, and Appeals.


An amount you are required to pay before a plan begins to share the cost of prescriptions.

Disenroll or Disenrollment:

The process of ending your membership in a plan. Disenrollment may be voluntary (your own choice) or involuntary (not your own choice).

Dispensing Fee:

A fee charged each time a covered drug is dispensed to pay for the cost of filling a prescription. The dispensing fee covers costs such as the pharmacist’s time to prepare and package the prescription.

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