Benefits Period

In Medicare Part A, a benefits period begins the day a person is admitted to a hospital or skilled nursing facility and ends when the individual has not received inpatient care for 60 consecutive days. Each new benefit period resets costs like deductibles.

Brand-name Drugs

Prescription drugs sold under a trademark-protected brand name, typically more expensive than generic drugs. Covered under programs like Medicare Part D, Medicaid, and CHIP.

Coverage Gap (Donut Hole)

A temporary limit on what Medicare Part D will cover for prescription drugs. After reaching a certain spending threshold, beneficiaries may pay more out-of-pocket for prescriptions until they reach the catastrophic coverage phase.

Catastrophic Coverage (Medicare Part D)

The phase of Medicare Part D coverage that begins after a beneficiary has spent a specified amount on prescription drugs during the year. During this phase, Medicare covers most prescription drug costs, and the beneficiary pays only a small copayment or coinsurance.

Dependent Coverage

Health insurance that covers not only the policyholder but also their dependents, typically children or a spouse. Under the ACA, dependents can stay on their parents’ health insurance plan until age 26.

Donut Hole (Coverage Gap)

The temporary limit on prescription drug coverage under Medicare Part D. During this phase, beneficiaries may pay a higher percentage of drug costs until they reach the threshold for catastrophic coverage.

Drug Formulary

A list of prescription medications covered by a health insurance plan, such as Medicare Part D or CHIP. Medications on the formulary are categorized into tiers, with different levels of cost-sharing for generic, brand-name, and specialty drugs.

Essential Health Benefits (EHBs)

A set of 10 categories of healthcare services that all ACA-compliant health plans must cover. These services include emergency care, hospitalization, maternity and newborn care, prescription drugs, mental health services, and more.

Exclusions

Services or treatments that are not covered by a health insurance plan. Exclusions vary by plan, and they may include specific treatments, procedures, or prescription drugs that are not considered medically necessary.

Enrollee

An individual who is covered by a health insurance plan, such as those offered through Medicare, Medicaid, CHIP, or the ACA Marketplace.

Formulary

A list of prescription medications that are covered by a health insurance plan, such as Medicare Part D or CHIP. Drugs listed on a formulary are usually divided into tiers, with different levels of cost-sharing based on the type of drug (generic, brand-name, or specialty).

Formulary Tiers

Categories within a drug formulary that determine the level of coverage and cost-sharing for medications. Typically, Tier 1 includes generic drugs with the lowest copays, while higher tiers include brand-name and specialty drugs with higher costs.

Full Medicaid Benefits

Comprehensive healthcare services provided to individuals who qualify for Medicaid based on income, age, disability, or other criteria. Full Medicaid benefits include hospital care, doctor visits, preventive services, prescription drugs, and long-term care, among others.

Family Coverage

A health insurance plan that covers an entire family, including the policyholder, spouse, and dependents. Under the ACA, parents can keep their children on their health plan until age 26, even if the children are not financially dependent or living with the parents.

Generic Drugs

Medications that contain the same active ingredients as brand-name drugs but are sold at lower prices. Medicare Part D, Medicaid, and CHIP often cover generic drugs to reduce costs for beneficiaries.

Gap Coverage

Insurance coverage that fills the gaps in a primary health insurance policy. Medicare Supplement (Medigap) plans are a common form of gap coverage, helping pay for out-of-pocket costs not covered by Original Medicare (such as copayments, coinsurance, and deductibles).

Lifetime Reserve Days (Medicare)

A set of 60 additional days that Medicare Part A beneficiaries can use during their lifetime for hospital stays beyond the standard 90 days per benefit period. These days come with a higher coinsurance cost and are only available once in a lifetime.

Local Coverage Determination (LCD)

Decisions made by Medicare Administrative Contractors (MACs) regarding whether a particular medical service or item is covered on a local basis. LCDs apply to services that may not have national coverage policies from Medicare.

Medicare Part B

The medical insurance component of Medicare that covers outpatient services, doctor visits, preventive services, and some home health care. Part B requires a monthly premium, which is based on income, and there are cost-sharing requirements for services.

Medicare Part D

The prescription drug coverage component of Medicare, available through private plans. Part D helps beneficiaries pay for the cost of prescription medications, with cost-sharing determined by drug formularies and tier levels.