A SMART GLOSSARY
Medicare Terminology
A plain-language glossary of the Medicare terms you'll hear most — what they mean and why they matter.
WHAT YOU PAY
- Deductible
- The amount you may be required to pay for covered healthcare or prescription drugs before certain plan benefits begin paying.
- Copayment / Copay
- A fixed dollar amount you pay for a covered service or medication, such as $20 for an office visit.
- Coinsurance
- A percentage of the cost of a covered healthcare service that you are responsible for paying.
- Maximum Out-of-Pocket / MOOP
- The most you pay during the plan year for covered Part A and Part B services under a Medicare Advantage plan, subject to the plan's rules. Prescription drug costs are handled separately under Part D rules.
- Premium
- The amount you pay for coverage, usually monthly. Medicare beneficiaries may have separate premiums for Part B, Part D, Medicare Advantage or Medigap coverage depending on their choices and circumstances.
HOW YOUR COVERAGE WORKS
- Formulary
- The list of prescription medications covered by a Part D or Medicare Advantage prescription drug plan.
- Network
- The doctors, hospitals, pharmacies and other healthcare providers that contract with a particular health plan.
- Prior Authorization
- A plan requirement that approval be obtained before certain services, procedures or medications will be covered.
- Step Therapy
- A prescription drug utilization-management requirement that may require trying another covered medication before the plan covers a particular drug.
- Quantity Limit
- A plan rule limiting how much of a particular medication will be covered during a specified period.