Glossary
Beneficiary
A person who is enrolled in and receiving health care coverage from the Medicare or Medicaid program.
Centers for Medicare & Medicaid (CMS)
The U.S. federal agency that is in charge of the Medicare and Medicaid programs.
Co-payment
The amount of money a health insurance beneficiary pays for medical services or prescription drugs. This amount depends on the health plan the beneficiary has chosen.
Coverage Gap or “Doughnut Hole”
Medicare drug plans have a gap or “doughnut hole” in their coverage. People enrolled in Medicare drug plans reach this gap in 2008 when the total yearly cost for their prescription drugs falls between $2,5100 and $5,726.25. (Note: The doughnut hole will be between $2,510 and $5,726.25 for 2008.) During the gap, Medicare does not pay for any prescription drugs.
Deductible
The amount a beneficiary must pay before his/her health care plan begins to pay for the beneficiary’s prescription drugs.
Dual-eligible
A person who qualifies for Medicare and full Medicaid benefits.
Formulary
A list of drugs that are covered under a prescription drug plan.
Generic Drug
A medicine that is sold under its chemical name. The medicine has the same active ingredient found in the brand-name drug. (For example, Ibuprofen is generic for Motrin®).
Low-income Subsidy
Financial assistance that is available for people enrolled in Medicare or Medicaid programs with low incomes, (below 150% of the Federal Poverty Line) and limited assets.
Medicare Prescription Drug Coverage
The program is referred to as Medicare Part D. This is a prescription drug coverage program that everyone enrolled in Medicare can sign up for. In this plan, Medicare beneficiaries pay monthly premiums and co-payments for prescription drugs.
Open Enrollment Period
The 6-month period in which beneficiaries can purchase a Medicare plan or make changes to an existing plan. For calendar year 2008, open enrollment begins on November 15, 2007 and ends on December 31, 2007.
Premium
The amount of money a beneficiary pays each month to be a part of a prescription drug plan.
In the language of Medicare, it is important to know how to minimize time in the “doughnut hole” or determine "low-income subsidy" eligibility.