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Annual Enrollment Period (AEP)
A set time when you can enroll in or change your Medicare plan, or switch to Original Medicare. The Annual Enrollment Period is from October 15 through December 7 each year.
Appeal
Formal process for asking us to reconsider a coverage decision we’ve made.
Brand-name drug
A prescription drug made and sold by the company that originally researched and developed it. It has the same active ingredients and formula as its generic version. Generally, other companies can’t make a generic drug until the patent on the brand-name version has expired.
Cancel
To end your membership in a plan before its effective date. Cancellation may be voluntary (your choice) or involuntary (not your choice). The Centers for Medicare & Medicaid Services (CMS) has rules around when you can cancel your plan.
Case management programs
Programs that help people with complex care needs. Case managers help coordinate the program participant’s care.
Catastrophic coverage phase
This is the drug coverage stage that starts after you pay $2,000 in annual out-of-pocket costs for covered Part D prescription drugs.
In this phase, you pay a $0 copay/coinsurance for your covered Part D prescription drugs through the end of the plan year.
Centers for Medicare and Medicaid Services (CMS)
The federal agency that runs the Medicare program. It works with states to run the Medicaid program, too.
Coinsurance
Amount you may have to pay out of pocket for covered services or prescription drugs. It’s a percent of the cost, such as 10 percent for a covered prescription drug. (To find out how much you’ll pay, multiply the percent times the cost. For example, if your coinsurance is 10% and a covered drug costs $100, you’ll pay $100 x .10, or $10.)
Complaint (grievance)
Formal process for reporting certain problems you may have with your plan’s service. These include issues with quality of care, wait times and customer service.
Copayment (copay)
Amount you may have to pay out of pocket for covered services or prescription drugs. It’s a set amount, such as $20 for a doctor’s visit.
Cost sharing
What you pay out of pocket for covered services or prescription drugs. Examples include a deductible, copay or coinsurance.
Coverage determination
The first decision your Medicare drug plan (not the pharmacy) makes about your benefits. It can be a decision about:
- If your drug is covered
- If you meet the plan’s requirements for covering the drug
- Or how much you’ll pay for the drug
You’ll also get a coverage determination if you ask your plan to make an exception to its rules to cover your drug.
Coverage gap phase (donut hole)
Drug payment phase that begins once you reach your initial coverage limit. In this phase, you’ll pay no more than 25% of the cost of your covered prescription drugs. This phase ends when you’ve spent enough to qualify for catastrophic coverage.
Starting in 2025:
The Medicare prescription drug benefit (Part D) will not include a coverage gap phase (donut hole).
Chronic Condition Special Needs Plan (C-SNP)
A type of Medicare Advantage Special Needs Plan for people who need extra support due to an eligible chronic or disabling condition as approved by CMS.
Deductible
The amount you may have to pay out of pocket for covered services or prescription drugs before your plan starts to pay. Your deductible resets at the beginning of each plan year.
Disenroll
To end your membership in a plan after its effective date. Disenrollment may be voluntary (your choice) or involuntary (not your choice). The Centers for Medicare & Medicaid Services (CMS) has rules around when you can disenroll.
Drug tier
A group of drugs on a formulary, or drug list. What you pay at the pharmacy will depend on what tier your drug is on. Generally, the lower the tier, the less you pay. The higher the tier, the more you'll pay.
Dual-Eligible Special Needs Plan (D-SNP)
A type of Medicare Advantage Special Needs Plan for people who qualify for both Medicare and Medicaid.
Enrollee
A member of our Medicare plan.
Evidence of Coverage (EOC)
Document that gives detailed information on your plan’s coverage and costs. It also outlines your rights and responsibilities as a plan member.
Exception
A type of coverage determination. If approved, an exception may let you:
- Get a drug that’s not on your plan’s formulary (a formulary exception)
- Get a non-preferred drug at the lower, preferred, cost-sharing level (a tier exception)
You may also ask for an exception if:
- Your plan requires you to try another drug first, before it will cover the drug your doctor prescribed
- Your plan limits the amount of a drug it will cover
Extra Help (Low-income Subsidy, or LIS)
A Medicare program that helps people with limited incomes and resources pay their Medicare Part D premiums, deductibles, coinsurance and other costs.
Formulary (drug list)
Generic drug
A prescription drug with the same active ingredient(s) as the brand-name version. Generally, a generic drug works the same as the brand-name version, but usually costs less.
Grievance (complaint)
Formal process for reporting certain problems you may have with your plan’s service. These include things like issues with quality of care, wait times and customer service.
Group health plan (group coverage)
A health plan an employer or other group may offer retirees.
Health maintenance organization (HMO)
A type of plan with a network of providers. With most HMO plans, you can only use providers in the plan’s network, unless it’s an emergency. And you may need a referral from your primary care physician to see a specialist, too.
In network
A doctor or other health care provider we have a contract with. We negotiate reduced rates with network providers to help you save money. Network providers won’t bill you for the difference between their standard rate and their contracted rate. All you pay is your coinsurance or copay, along with any deductible.
Initial coverage limit
For 2025 plans:
The initial coverage limit will be replaced by a $2,000 out-of-pocket spending limit for covered Part D prescription drugs. This means you won’t pay more than $2,000 out-of-pocket for all of your covered Part D drugs (not including your premium) in 2025.
Initial coverage phase
This is the phase after you have met your deductible (if it applies). Here, you’ll pay part of the cost (a copay or coinsurance) for your covered Part D prescription drugs.
Initial Enrollment Period (IEP)
The seven-month period you have to sign up when you first become eligible for Medicare. It includes the three months before, the month of, and the three months after your 65th birthday.
Institutional Special Needs Plan (I-SNP)
A type of Medicare Advantage Special Needs Plan. I-SNPs are for people who expect to need 90 or more days of care and who have had, or are expected to need, the level of services provided in:
- A long-term care (LTC) skilled nursing facility (SNF)
- An LTC nursing facility (NF)
- An SNF/NF
- An intermediate care facility for individuals with intellectual disabilities (ICF/IDD)
- An inpatient psychiatric facility
Late enrollment penalty (Part D)
An amount added to your Medicare Part D monthly premium if you go without creditable coverage for at least 63 days in a row (after your Initial Enrollment Period). If you get Extra Help, you won’t have to pay this this penalty. If you don’t get Extra Help, you’ll pay the penalty for as long as you have a Medicare drug plan.
Long-term supply
A 90-day supply (for PDPs) or 100-day supply (for MAPD plans) of certain maintenance drugs. With our Medicare plans, long-term supplies are available at select retail pharmacies and by mail through CVS Caremark® Mail Service Pharmacy. See also "Maintenance drugs."
MA Plan
A Medicare Advantage plan (Part C) that doesn’t cover prescription drugs.
MAPD Plan
A Medicare Advantage plan (Part C) that covers prescription drugs.
Mail-order pharmacy
A pharmacy through which you can get a long-term supply of maintenance drugs delivered to you by mail.
Maintenance drugs
Prescription drugs you take on a regular basis for a chronic or long-term condition, like high blood pressure.
Maximum out-of-pocket (MOOP)
The most you’ll pay in a plan year for covered medical services. Once you reach your MOOP, we’ll pay 100% of your covered medical costs for the rest of the plan year. (Your premium and prescription drugs don’t count toward your MOOP.) You’ll find your MOOP in your plan’s Summary of Benefits or Evidence of Coverage.
Medicaid (Medical Assistance)
A program that provides health coverage to low-income adults, children, elderly adults and people with disabilities. It’s funded jointly by states and the federal government. And it’s administered by states according to federal requirements.
Learn more about the differences between Medicare and Medicaid
Medicare
A federal health insurance program for people age 65 or older. (Some people under age 65 also may also qualify.) People with Medicare can get their health coverage through Original Medicare, a Medicare Cost plan, a Program of All-Inclusive Care for the Elderly (PACE) plan or a Medicare Advantage plan.
Medicare Part D
Prescription drug coverage. You can get Part D through:
- A Medicare Advantage plan that covers prescription drugs
- Or a stand-alone prescription drug plan
Medicare Supplement Insurance (Medigap or Med Supp)
A type of plan designed to fill the gaps in Original Medicare coverage. It only works with Original Medicare. You can’t have a Medicare Advantage plan and a Medigap plan, too.
Member
A person with Medicare who’s eligible for covered services and has enrolled in our plan. The Centers for Medicare & Medicaid Services has confirmed their enrollment.
Network
A group of health care providers that includes doctors, dentists and hospitals. A health care provider in a network signs a contract with a health plan to provide services. Usually, a network provider provides these services at a special rate. With some health plans, you get more coverage when you get care from network providers.
Network pharmacy
A pharmacy that has a contract with our plan. In most cases, we only cover your prescriptions if you fill them at a network pharmacy.
Network provider
A provider that has a contract with our plan. A health care provider in a network signs a contract with a health plan to provide services. Usually, a network provider provides these services at a special rate. With some health plans, you get more coverage when you get care from network providers.
Optional supplemental benefits
Benefits you can add to your Medicare Advantage plan for an additional premium, such as dental, vision and hearing
Coverage determinations
A decision about whether we’ll cover certain items or services or how much you’ll have to pay for them.
Out-of-network pharmacy
A pharmacy that doesn’t have a contract with us. We won’t cover most drugs you get from an out-of-network pharmacy unless certain conditions apply.
Out-of-network provider
A provider that doesn’t have a contract with us.
Point-of-Service (POS)
A type of plan with a network of providers. Some POS plans let you use providers outside the network. But you may pay more for your care.
Preferred pharmacy
A pharmacy that has a contract with our plan. Your cost sharing (what you’ll pay out of pocket for your covered drugs) is often lower at these pharmacies. And we identify them differently in our online directory.
Preferred provider organization (PPO)
A type of plan with a network of providers. You can use out-of-network providers, too. But you may pay more for your care.
Premium
What you pay each month to your plan for medical and/or prescription drug coverage. If you get coverage from an employer or group health plan, you and the employer may share the cost.
Primary care physician or primary care provider (PCP)
Your main contact for care. A PCP can give you a referral to see a specialist and coordinate your care. They can also help you monitor and manage any chronic health issues you have, like diabetes or high blood pressure. Some health plans require you to have a PCP.
Prescription drug plan (PDP)
A standalone Medicare Part D plan that covers prescription drugs. Depending on the plan, it may cover some vaccines, too.
Prior authorization
Some services or prescription drugs require your doctor and the plan to approve them before you get care or fill a prescription. The approval tells you if the plan covers the service or prescription. Check with your plan to see which drugs or services need prior authorization. It’s also called precertification, certification and authorization. In Texas, it’s known as pre-service utilization review. And it’s not verification as defined by Texas law.
Provider
A doctor, hospital, pharmacy or other licensed professional or facility that provides health care services.
Quantity Limit (QL)
A special requirement where we limit the amount of a drug we’ll cover in a certain timeframe for safety reasons. For example, 60 tablets for a 30-day prescription.
Referral
A type of preapproval from your primary care provider (PCP) to see a specialist. When your PCP issues a referral, they share the reason for the recommendation with the specialist. They also help coordinate your visit, so you get the proper care.
Special Enrollment Period (SEP)
A time when you may be able to enroll in or change your Medicare plan if you:
- Lose your employer coverage
- Move to a new service area
- Get Extra Help for your prescription drugs
- Have other special circumstances
It’s also called a “special election period.”
Special Needs Plan (SNP)
A type of Medicare Advantage plan (for example, D-SNP, C-SNP, I-SNP). It provides more focused health care for specific groups of people, such as those who:
- Have both Medicare and Medicaid
- Live in a nursing home
- Have certain chronic medical conditions
Standard pharmacy
A pharmacy that has a contract with us but doesn’t offer preferred cost sharing.
Step therapy
A special requirement where you must try a certain drug first before we’ll cover another drug to treat your medical condition. For example, if both drug A and drug B treat your medical condition, we may not cover drug B unless you try drug A first. If drug A doesn’t work for you, then we’ll cover drug B.
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