Glossary Of Terms
A limit on the benefits your insurance company will pay each year. These limits are sometimes placed on particular services such as prescriptions or hospitalizations. Annual limits may be placed on the dollar amount of covered services or on the number of visits that will be covered for a particular service. After an annual limit is reached, you must pay all associated health care costs for the rest of the year. *1
The type of coverage offered for certain health care items or services covered by your health insurance plan. Covered benefits and excluded services are defined in your health insurance plan’s coverage documents. In Medicaid or Children’s Health Insurance Program (CHIP), covered benefits and excluded services are defined in state program rules. *2
Catastrophic claims coverage:
Catastrophic coverage is insurance coverage that is designed to protect you from financial disaster in the case of a serious medical emergency. This type of coverage focuses primarily on the most expensive medical care; smaller expenses such as doctor visits or prescription drugs are usually not covered in catastrophic plans. The plans typically have low premiums but high deductibles that must be met before the insurer begins paying claims. *3
Often called “chemo,” chemotherapy uses anti-cancer drugs that are put into a vein, a muscle, or taken as a pill. Chemotherapy drugs enter the bloodstream and go throughout the body to reach and destroy cancer cells. Chemotherapy drugs attack cells that grow quickly, which is why they work against cancer cells. However, chemotherapy drugs also affect non-cancer cells that also grow and divide quickly, which can lead to side effects. *5
Children’s Health Insurance Program (CHIP):
Formerly called the State Children’s Health Insurance Program (SCHIP), it is a program that provides health coverage to children whose family’s incomes are too high to qualify for Medicaid but can’t afford private insurance coverage. CHIP is administered by the states and the federal government provides matching funds to finance the program. *6
A request for payment that you or your health care provider submits to your health insurer when you get items or services you think are covered by your insurance plan. *4
An out-of-pocket cost you may be required to pay that is likely a percentage of the cost for services after you pay any deductibles. For example, if your health insurance plan’s coinsurance rate was 20 percent and you’ve already met your deductible, the amount you have to pay for a $100 doctor office visit is $20. Your health insurance plan pays the rest of the cost – $80.7
Co-pay assistance programs, sometimes called “patient assistance programs,” are often funded by pharmaceutical companies, patient groups and medical foundations. These programs provide financial assistance to patients who need help paying for health care treatment and qualify for the programs’ medical and financial requirements. Patients can apply directly for these programs, or physicians, social workers or pharmacists may apply on a patient’s behalf.
Co-pay vouchers for prescribed medications, sometimes called “coupons,” are provided by some pharmaceutical companies and are often distributed by a physician or pharmacist to help you pay for your prescription medications. Alternatively, some may be found online. A voucher may eliminate your co-pay altogether or reduce it to a specific price. Government-funded insurance programs like Medicare Part D and Medicaid prohibit the use of vouchers. However, you can use these vouchers if you’re in the Medicare Part D “donut hole.”
An amount you may be required to pay for a medical service or supply, like a doctor’s visit, hospital outpatient visit, or prescription medication. A co-payment, often called a “co-pay,” is usually a set amount rather than a percentage. For example, you might pay $10 or $20 for a doctor’s visit or prescription medication no matter what the total cost is. Co-pays typically vary depending on your health insurance plan. *8
An amount you may be required to pay as your share of the cost for a medical service or supply, like a doctor’s visit, hospital outpatient visit or prescription drug. Cost-sharing can include co-payments, co-insurance and deductibles. If you are a Medicaid or Children’s Health Insurance Program (CHIP) beneficiary, your premiums are also considered cost sharing. *9
f you are enrolled in Medicare Part D prescription drug coverage, a coverage gap is the period of time in which you are responsible for paying a higher portion of the cost for your prescription drugs until you spend enough to qualify for catastrophic coverage. The coverage gap, also called the “donut hole,” starts when you and your plan have paid a set dollar amount for prescription drugs during that year. *10 (See Donut Hole)
The amount you must pay for health care services or prescription medications each year before your insurance begins to pay. For example, if your deductible is $1000, your insurance will not pay anything until you have incurred $1000 out-of-pocket for covered health care services or prescription medications. The deductible may not apply to all services. *11
Dispense as written:
Requesting your health care provider note “dispense as written,” “medically necessary” or “do not substitute” on your prescription or e-prescription ensures your pharmacist will check with you and your health care provider before any substitutions or changes to your prescription occur.
If you are enrolled in Medicare Part D prescription drug coverage, the donut hole is the period of time in which you are responsible for paying a higher portion of the cost for your prescription drugs until you spend enough to qualify for catastrophic coverage. The donut hole, also called the “coverage gap,” starts when you and your plan have paid a set dollar amount for prescription drugs during that year. *12 (See Coverage Gap)
If you are a Medicare beneficiary, your health care provider may request an exception when the drug he or she prescribes is medically necessary for you but is not included on your formulary or is included on a tier that requires you to pay a greater out-of-pocket cost. A “formulary exception” is a drug plan’s decision to cover a drug that is not on its drug list or to waive a coverage rule. A “tiering exception” is a drug plan’s decision to charge a lower amount for a drug that is on its non-preferred drug tier. You must request an exception, and your health care provider must send a supporting statement explaining the medical reason for the exception. *13
A list of prescription drugs covered by your prescription drug insurance plan or another insurance plan offering prescription drug benefits. Also called a “drug list,” a formulary may include both generic drugs and brand-name drugs, as well as how much you would pay for each drug. If the insurance plan uses tiers, the formulary may list which drugs are in which tiers. *14
A prescription drug that is chemically equivalent to a brand-name drug and has the same dosage form, safety, strength, route of administration, quality, performance characteristics and intended use as a brand-name drug. Generic drugs usually cost less than brand-name drugs. The Food and Drug Administration (FDA) rates approved generic drugs to be chemically equivalent and as safe and effective as brand-name drugs. *15
Health care provider:
A person or organization that is licensed to provide health care services. Doctors, physician assistants, nurse practitioners, registered nurses and pharmacists are examples of health care providers.
A contract that requires your health insurer to pay some or all of your health care costs in exchange for a premium.
A state-administered health insurance program for low-income families and children, pregnant women, the elderly, people with disabilities and, in some states, other childless adults. The federal government provides a portion of the funding for Medicaid and sets guidelines for the program. States also have choices in how they design their program, so Medicaid varies state by state and may have a different name in your state.
Medicare Part D:
An optional program for Medicare beneficiaries that provides prescription drug coverage. There are two ways to get Medicare prescription drug coverage: through a Medicare Prescription Drug Plan or a Medicare Advantage Plan that includes drug coverage. These plans are offered by insurance companies and other private companies approved by Medicare.
The federal health insurance program for people ages 65 or older, certain younger people with disabilities and people with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant, sometimes called ESRD).
Oral chemo parity:
Reimbursement practice that ensures patients have similar insurance coverage for chemotherapy regardless of how the chemotherapy is administered. Typically intravenous/injected chemotherapy is covered under health insurance benefits, while oral chemotherapy is covered under prescription insurance benefits. Often health insurance benefits require you to pay much lower out-of-pocket costs, while prescription insurance benefits require you to pay higher out-of-pocket costs with unlimited cost-sharing, meaning there is no cap on how much you may be required to spend. Given that an increasing number of chemotherapy drugs are oral, this can make some chemotherapy treatments unaffordable for many cancer patients.
Anti-cancer medicines or chemotherapies that are taken by mouth, such as a pill.
Expenses related to health services or prescription drugs that you must pay on your own above and beyond your monthly health insurance premium. Depending on your health plan, out-of-pocket costs may include an annual deductible, co-insurance and co-payments.
The most you have to pay during a policy period (usually a year) before your health insurance plan begins to pay 100 percent of your health care claims. This limit never includes your monthly premiums or health services/items your health insurance plan doesn’t cover. Some health insurance plans don’t count all of your co-payments, deductibles, co-insurance payments, out-of-network payments or other expenses toward this limit. In Medicaid and the Children’s Health Insurance Program (CHIP), the limit includes premiums.
Pharmacy benefits manager:
A third-party company that handles the drug insurance benefit program for employers and public and private insurance companies. Pharmacy benefits managers, abbreviated PBMs, often process and pay for drug claims, develop and maintain formularies, work with pharmacies and negotiate discounts and rebates with pharmaceutical manufacturers.
A term used to describe a situation in which an individual does not pick up a medication at the pharmacy that was prescribed by their health care provider and filled by the pharmacist.
Approval from your health insurer that a health care service, product or prescription drug is medically necessary and will be covered by your health insurance. Your health insurance plan may require prior authorization for certain services before you receive them, except in an emergency.
A practice used by public and private health insurers, pharmacy benefits managers (PBMs) and companies that process and pay for prescriptions that divides medicines into three or more tiers, typically: generic, branded and preferred. Each tier is assigned a different co-payment. Many insurance plans have now added a specialty tier, which is a fourth category of medicines that requires you to pay co-insurance, or a percentage of the drug price.
A coverage rule used by some health and prescription drug insurance plans that requires you to try one or more similar, lower cost drugs to treat your condition before the plan will pay for the prescribed drug.
Therapeutic substitution means the drug originally prescribed to you has been switched by a pharmacist to another drug that is a different chemical compound. This is different than generic substitution, where a branded drug prescribed to you is switched to its generic equivalent, meaning one approved by the United States Food and Drug Administration (FDA) as a chemical equivalent with the same dosage strength.