Common Medicare Advantage terms and their definitions
Deductible: The amount you pay for medical services or prescription drugs before your plan starts to pay.
Coinsurance: The percentage you pay for medical services or prescription drugs after your deductible.
Copayment (Copay): The flat dollar amount you pay for medical services or prescription drugs.
Cost sharing: The amount you pay for medical services or prescription drugs. It can include your copayment, coinsurance and deductible.
Extra Help: A federal program that helps pay for some of the out-of-pocket costs of Medicare prescription drug coverage. It’s also known as the Part D Low-Income Subsidy (LIS).
Maximum Out Of Pocket (MOOP): The most you pay during your plan’s policy period (usually a year) for covered medical services. Once you reach your MOOP, your plan pays 100% of covered medical services. Your premium doesn’t count toward your MOOP.
Network pharmacy: A pharmacy that has a contract with your plan. Your plan may only cover your prescription drug if you fill it at a network pharmacy. (See Preferred Pharmacy below)
Network provider: A health care provider (for example, a doctor, hospital or facility) that has a contract with your plan.
Preferred Pharmacy: Preferred pharmacies (that may be in many Medicare Advantage plans or Stand Alone Prescription Drug Plans), have contracts with your plan for specific Preferred Pharmacies, whereas, if you get your drugs from a preferred pharmacy in your plan, you will generally pay less, versus getting them at just a standard pharmacy in the plan network, where you will generally pay more for the same drugs.
Premium: What you pay each month to your plan for medical and prescription drug coverage (if included).
Primary care physician (PCP): This is your main doctor. You can visit your PCP for routine medical care and annual exams. They can also diagnose and treat common medical conditions.
Prior authorization: Requires you or your doctor to get approval from your plan before it covers a medical service or prescription drug.
Total drug cost: What both you and your plan pay for a covered prescription drug.