Catastrophic Coverage - A name for the step of a Part D plan in which the plan pays nearly all of your drug expenses until the end of the year, with no upper limit. In this step, you pay only a small share of your drug expenses (approximately five percent).

Coinsurance - 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, the coinsurance will vary depending on how much you have spent.

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

Coverage Gap - Amount you pay for Medicare prescription drug coverage, with a PDP or an MA-PD, after the initial coverage limit and until the total you pay out of your pocket for covered prescription drugs reaches $3,600.

Creditable Prescription Drug Coverage - Prescription drug coverage (like from an employer or union), that is, on average, at least as good as the Medicare standard prescription drug coverage.

Deductible - The amount you must pay for health care or prescriptions, before Original Medicare, your prescription drug plan or other insurance begins to pay. For example, in Original Medicare, you pay a new deductible for each benefit period for Part A, and each year for Part B. These amounts can change every year.

Formulary - A list of certain kinds of prescription drugs that a Medicare drug plan will cover subject to limits and conditions.

Initial Coverage Limit - Amount you pay for Medicare prescription drug coverage, with a PDP or an MA-PD, after you have paid the annual deductible (if applicable) and until the total covered prescription drug costs paid by you and the plan add up to $2,250.

Initial Enrollment Period (IEP) - The seven-month period surrounding your Medicare eligibility. If you become eligible for Medicare in January 2006, you can join the Medicare plan option of your choice from November 15, 2005 through May 15, 2006.

Medicare Advantage Plan - A plan offered by a private company that contracts with Medicare to provide you with all your Medicare Part A and Part B benefits. In most cases, Medicare Advantage Plans also offer Medicare prescription drug coverage. A Medicare Advantage Plan can be an HMO, PPO, or a Private Fee-for-Service Plan.

Medicare Health Plan - A Medicare Advantage Plan (such as an HMO, PPO, or Private Fee-for-Service Plan) or other plan such as a Medicare Cost Plan. Everyone who has Medicare Part A and Part B is eligible for a plan in their area, except those who have End-Stage Renal Disease (unless certain exceptions apply).

Medicare Modernization Act - The new Medicare prescription drug program is a result of the Medicare Modernization Act. In 2003, Congress passed a new law to bring people with Medicare more choices in health care coverage and better health care benefits. This new law preserves and strengthens the current Medicare program and adds important new preventive benefits. It also adds a prescription drug benefit (Medicare Part D) that Medicare beneficiaries may purchase from a private insurer. The benefit also provides extra help to people with low incomes.

Medicare Prescription Drug Plan - A stand-alone drug plan, offered by insurance and other private companies to add prescription drug coverage to the Original Medicare Plan, Medicare Private Fee-for-Service Plans that dont have prescription drug coverage, and Medicare Cost Plans.

Medigap Policy - Medicare supplement insurance sold by private insurance companies to fill "gaps" in Original Medicare Plan coverage. Except in Massachusetts, Minnesota, and Wisconsin, there are 12 standardized plans labeled Plan A through Plan L. Medigap policies only work with the Original Medicare Plan.

Original Medicare Plan - A fee-forservice health plan that lets you go to any doctor, hospital, or other health care supplier who accepts Medicare and is accepting new Medicare patients. You must pay the deductible. Medicare pays its share of the Medicare-approved amount, and you pay your share (coinsurance). In some cases you may be charged more than the Medicare approved amount. The Original Medicare Plan has two parts: Part A (Hospital Insurance) and Part B (Medical Insurance).

Out-of-Pocket Costs - The amounts you pay as your share of your prescription drug costs in a Part D plan. Out-of-pocket costs include deductibles, co-insurance, and the amounts you pay in the coverage gap. In a Part D plan, any amounts you pay, but for which you are later reimbursed by someone else, such as an employers insurance plan, do not count as part of your out-of-pocket costs. The out-of-pocket costs you pay for which you are not reimbursed are called your "true out-of-pocket costs," or "TROOP." When your "true out-of-pocket costs" exceed $3,600, you are eligible for the catastrophic coverage step of a Part D plan.

Premium - The periodic payment to Medicare, an insurance company, or a health care plan for health care or prescription drug coverage.