2025 Medicare Glossary

Prescription Drug Plan Terms and What They Mean

Medicaid (or Medical Assistance):

Medicaid is a joint Federal and state government program that helps with medical costs for certain people with limited incomes and resources. Some people with Medicare are also eligible for Medicaid. In addition, there are programs offered through Medicaid that help people with Medicare pay their Medicare costs, such as their Medicare premiums. To find out more about Medicaid and its programs, contact the Medicaid Agency in your state using the contact information in the Appendix of the Evidence of Coverage (EOC).

Medicare:

The federal health insurance program for people 65 years of age or older, some people under age 65 with disabilities, and people with End-Stage Renal Disease (generally those with permanent kidney failure who need dialysis or a kidney transplant).

Medicare Advantage (MA) Plan:

A benefit package offered by a Medicare Advantage Organization that offers a specific set of health benefits at a uniform premium and level of cost-sharing to all people with Medicare who live in the service area covered by the Plan. A Medicare Advantage Organization may offer more than one plan in the same service area.

Medicare Prescription Drug Coverage (Medicare Part D):

Insurance to help pay for outpatient prescription drugs, vaccines, biologics, and some supplies not covered by Medicare Part B.

Member (Member of our Plan, or “Plan Member”):

A person with Medicare who is eligible to get covered services, who has enrolled in our Plan, and whose enrollment has been confirmed by the Centers for Medicare & Medicaid Services (CMS).

Network Pharmacy:

Pharmacies, including retail, mail-order, and institutional pharmacies, under contract with a Part D sponsor to provide covered Part D drugs at negotiated prices to Part D enrollees.

Original Medicare ("Traditional Medicare" or "Fee-for-Service" Medicare):

Original Medicare is coverage managed by the federal government. Generally, there's a cost for each service. Part A covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health care. Part B covers certain doctors' services, outpatient care, medical supplies, and preventive services.

Out-of-Network Pharmacy:

A licensed pharmacy that is not under contract with a Part D sponsor to provide negotiated prices to Part D plan enrollees.

Out-of-Pocket Costs

See Cost-Sharing

Over-the-Counter Medicines (OTC Medicines):

Medicines that do not require a prescription.

Preferred Cost-sharing Pharmacy:

The Blue MedicareRx plan has some pharmacies that offer covered drugs to members of our plan that may have lower cost-sharing levels than at other network pharmacies.

Premium:

A payment for health or prescription drug coverage that is made to your plan or Medicare.

Prescription Drug Plan (PDP):

A prescription drug plan, an MA-PD plan, a PACE Plan offering qualified prescription drug coverage, or a cost plan offering qualified prescription drug coverage.

Prior Authorization:

Some medications require approval in advance. Before filling a prescription for some medications, you may have to get approval from Blue MedicareRx to make sure the medication is covered under your plan. This is called “prior authorization.”