Supporting Information

Help Glossary How Plans Work How To Choose a Plan


A B C D E F G H I J K L M  
N O P Q R S T U V W X Y Z View All

Term Definition
Catastrophic Coverage

Once your total drug costs reach the $5,726.25 maximum, you pay a small coinsurance (like 5%) or a small copayment for covered drug costs until the end of the calendar year


Refers to the partner relationships established between Medicare Prescription Drug Plans and other organizations. Some drug plans enter into agreements with other organizations to help market their drug plans. These relationships are between the drug plan and the partner organizations and are outside of the contract with Medicare.


The amount you may be required to pay for services after you pay any plan deductibles. In the Original Medicare Plan, this is a percentage (like 20%) of the Medicare approved amount.
You have to pay this amount after you pay the deductible for Part A and/or Part B. In a Medicare Prescription Drug Plan or Medicare Health Plan, the coinsurance will vary depending on how much you have spent.

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.)


In some Medicare health and prescription drug plans, the amount you pay for each medical service, like a doctor's visit, or prescription. A copayment is usually a set amount you pay. For example, this could be $10 or $20 for a doctor's visit or prescription. Copayments are also used for some hospital outpatient services in the Original Medicare Plan.

Cost Sharing

The amount you pay for health care and/or prescriptions. This amount can include copayments, coinsurance, and/or deductibles.

Coverage Gap

Medicare drug plans may have a "coverage gap," which is sometimes called the "donut hole." A coverage gap means that after you and your plan have spent a certain amount of money for covered drugs (no more than $2,510), you have to pay out-of-pocket all costs for your drugs while you are in the "gap." The most you have to pay out-of-pocket in the coverage gap is $3,216.25. This amount doesn't include your plan's monthly premium that you must continue to pay even while you are in the coverage gap. Once you've reached your plan's out-of-pocket limit, you will have "catastrophic coverage." This means that you only pay a coinsurance amount (like 5% of the drug cost) or a copayment (like $2.15 or $5.35 for each prescription) for the rest of the calendar year.

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

*NOTE: An asterisk (*) after a term means that this definition, in whole or in part, is used with permission from Walter Feldesman, ESQ., Dictionary of Eldercare Terminology, Copyright 2000.

This glossary explains terms in the Medicare program, but it is not a legal document. The official Medicare program provisions are found in the relevant laws, regulations,and rulings.