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Useful Terms
Beneficiary - The name for a person who has health care
insurance through the Medicare or Medicaid program.
Deductible - The amount of money you must pay out of your pocket first,
before benefits are payable. For example: If a drug plan has a $250 deductible,
the participant must pay the first $250 of drug costs on their own and then
the plan benefits begin.
Formulary - A list of certain drugs that are covered by
a prescription drug plan. Some plans may cover more drugs than others.
Premium - The amount of money paid for a specific type
of insurance coverage or benefit.
Preventative Service - Healthcare to keep you healthy
or to prevent illness (for example, physical exams, Pap tests, pelvic
exams, flu shots and screening mammograms).
Prior Authorization - Makes the
pharmacist or doctor get consent from the plan before a prescription
can be filled.
Step Therapy - Requires
the patient to use a similar and often less-costly drug before the doctor’s
preferred prescription can be filled.
Generic Drug - A prescription drug that has the same active-ingredient
formula as a brand name drug. Generic drugs usually cost less than brand
name drugs and are rated by the Food and Drug Administration (FDA) to be
as safe and effective as brand name drugs.
Brand Name Drug - A prescription drug which is protected
by patent and has an exclusive manufacturer.
Creditable coverage - A prescription drug plan from an
employer, union, or private plan that is at least as good as standard
Medicare prescription drug coverage. If you have this kind of plan,
you can keep what you have. You will not pay a higher premium if you
sign up for a Medicare prescription drug plan after May 15, 2006.
Co-payment - A fixed dollar amount you have to pay for
each drug.
Co-insurance - A fixed percentage of the price of a covered
drug that you have to pay. It may differ from drug to drug. It can range
from 0 to 100%.
For additional terms please see the glossary online at http://www.medicare.gov/Glossary/Search.asp
Source: Centers for Medicare & Medicaid Services and Pick
the Plan That's Best for You brochure.
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