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Annual Enrollment Period (AEP) |
When individuals can enroll in or switch to new prescription drug coverage. November 15 to December 31 annually for coverage beginning January 1. |
| Brand Name Drug |
Drug that is patented and can only be produced and sold by patent-holding company. |
| Catastrophic Coverage |
Insurance coverage one will receive after total drug costs have reached maximum amount for year ($5,451.25 for 2007) until end of calendar year. You will still pay coinsurance (5%) or co-payment ($2.25 for generics and $5.65 for brand name drugs) during this period. |
| Coinsurance |
Percentage amount that you pay after meeting deductibles. Can vary for drugs in different prescription drug coverage tiers. |
| Co-payment (co-pay) |
Dollar amount you pay, which can vary per type and kind of drug. |
| Deductible |
Amount you cover for prescription drugs before coverage begins. |
| Donut Hole (Coverage Gap) |
Amount a plan member pays to purchase a prescription. Once the deductible is met, the plan covers the rest of the full amount of the drug. |
| Formulary |
List of drugs covered by a plan. |
| Generic Drugs |
Cost less than brand name drugs but contain exact same ingredients. Approved by the FDA and has same effectiveness. |
| Initial Coverage Limit |
Maximum limit of coverage under the initial coverage period |
| Initial Coverage Period |
The period after you have met your deductible (if you have one) and before your total drug expenses, have reached $2,510 including amounts you've paid and what our planhas paid on your behalf. |
| Initial Enrollment Period (IEP) |
When an individual is first eligible to enroll in a Part D plan. Generally, individuals are eligible to enroll if they are entitled to receive Medicare Part A or enrolled in Part B, and live in the plan’s service area. |
| Non-preferred Drug |
Higher cost to plan members. Drugs that are not on the approved formulary. |
| Preferred Drug |
Lowest cost to plan members. Chosen by insurance company to be first choice drug to treat certain medical condition based on cost, efficacy, and safety of drug. Drugs that are on the approved formulary. |
| Premium |
Monthly payment made to cover cost of the drug coverage. |
| Prior Authorization |
In some cases, the insurance company requires approval from a member’s physician to show there is a medically necessary reason for using a particular drug in order for the drug costs to be covered under the plan. |
| Quantity Limits |
When the amount of drug is limited in coverage by a plan. |
| Retail In-Network Pharmacy |
Pharmacy in our approved network that offers covered drugs to members at lower out-of-pocket costs than a pharmacy that is not in our approved network. |
| Retail Out-of-Network Pharmacy |
Pharmacy that is not in our approved network and offers drugs to members at a higher out-of-pocket cost than a pharmacy that is in our approved network. |
| Step Therapy |
Some plans may require a member to try one drug before they will cover another drug that will treat the same condition. For example, if Drug A and Drug B both treat your medical condition, a plan may require your doctor to prescribe Drug A first. However, if Drug A does not work for you, the plan will cover Drug B. |
| Tier |
How drugs are grouped. Costs differ between tiers. Tier 1 – Generic drugs
Tier 2 – Preferred Brand name drugs
Tier 3 – Non-preferred brand name drugs |
| TTY |
TeleTypewriter - device that assists hearing-impaired individuals. |
| TDD |
Telecommunications device for the deaf. |
