Medicare.gov - the Official U.S. Government Site for Medicare

Glossary

Term Definition
Catastrophic Coverage

Once your spending on prescription drugs reaches a certain amount called the Out of Pocket Threshold you automatically get "catastrophic coverage." Catastrophic coverage means that you only pay a small coinsurance amount or a copayment for covered drugs for the rest of the year.

Choose Any Doctor/Any Hospital

There are no networks - you can go to any doctor, supplier, hospital or other facility that participates in Medicare and is accepting new Medicare patients.

Coinsurance

An amount you may be required to pay as your share of the cost for health care services or prescriptions after you pay any deductibles. Coinsurance is usually a percentage (for example, 20%).

Company Name

Name of company that contracts with Medicare to offer a Medicare Prescription Drug Plan or a Medicare Health Plan. (The number next to the name is for Medicare's use only.)

Copayment

An amount you may be required to pay as your share of the cost for health care services, like a doctor's visit, or prescriptions. A copayment is usually a set amount, rather than a percentage. For example, you might pay $10 or $20 for a doctor’s visit or prescription.

Cost Sharing

The amount you may be required to pay as your share of the cost for health care services or prescriptions. Cost sharing can include copayments, coinsurance, and/or deductibles.

Coverage Gap

Medicare drug plans may have a "coverage gap," which is sometimes called the "donut hole." This means that after you and your drug plan have spent a certain amount of money for covered drugs, you may have to pay more for your drugs (until you reach the out-of-pocket threshold).

Note: If you get extra help paying your drug costs, you won't have a coverage gap. However, you will probably still have to pay a small copayment or coinsurance amount.

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