2024 Medicare Glossary
Prescription Drug Plan Terms and What They Mean
Income Related Monthly Adjustment Amount (IRMAA)
If your modified adjusted gross income as reported on your IRS tax return from 2 years ago is above a certain amount, you'll pay the standard premium amount and an Income Related Monthly Adjustment amount, also known as IRMAA. IRMAA is an extra charge added to your premium. Less than 5% of people with Medicare are affected, so most people will not pay a higher premium.
Initial Coverage Limit:
The maximum amount of coverage in the Initial Coverage Stage.
Initial Coverage Stage:
This stage begins after you meet the plan’s deductible and lasts until your total drug expenses have reached $5,030. This includes amounts paid by you and paid by your plan on your behalf.
Initial Election Period (IEP):
Your Medicare Part D IEP is a 7-month period that begins 3 months before the month
you turn 65. It continues through the month you turn 65 and ends 3 months after.
For example, if your birthday falls on May 2, your 7-month IEP spans the 7-month
period from February through August.
Note: There is an IEP exception: If your birthday falls on the first of any month, your 7-month IEP begins and ends one month sooner. For example, if your birthday is May 1, your 7-month IEP is the same as if you were born in April, beginning in January and ending in July.
Late Enrollment Penalty (LEP):
If you do not have creditable prescription drug coverage, you will have to pay a late enrollment penalty in addition to your monthly plan premium. See Late Enrollment Penalty FAQs
List of Covered Drugs (Formulary or “Drug List”):
The plan has a List of Covered Drugs (Formulary). We call it the “Drug List” for short. It tells which Part D prescription drugs are covered by Blue MedicareRx (PDP). The drugs on this list are selected by the plan with the help of a team of doctors and pharmacists. The list must meet requirements set by Medicare. Medicare has approved the Blue MedicareRx Drug List. The Drug List also tells you if there are any rules that restrict coverage for your drugs.
Low Income Subsidy (LIS):
See “Extra Help.”