Definition
A plan that is aimed at protecting oneself from the high costs of a severe accident or unexpected, debilitating illness or disease; it has low monthly premium payments in exchange for a very high deductible (e.g., $5,000–$10,000).
Catastrophic Insurance
The amount that the patient is to pay for each prescription as determined by the insurance carrier.
Copayment (Copay)
An amount on some insurance plans that must be paid by the insured person before the insurance company considers paying its portion of a medical or drug cost.
Deductible
Federally sponsored insurance that partially covers the cost of outpatient doctor visits; may cover the cost of nebulizer, nebulizer medication, and diabetic supplies.
Medicare Part B
The cost a patient pays each month for health and/or drug insurance.
Monthly Premium
Insurance policy when a former employer is required to keep a former employee on the employer insurance plan at full premium cost for 18 to 36 months; the ACA guarantees such patients cannot lose coverage with job changes
COBRA Insurance
Insurance coverage in which a patient pays one copay for brand name drugs and a lower copay for generic drugs; also known as two-tier.
Dual Copay
The average price that wholesalers charge the pharmacy for a drug, serving as the benchmark price to estimate reimbursement rates and retail price without insurance.
AWP (Average Wholesale Price)
Federal- and state-sponsored insurance that covers both health and prescription insurance from the same insurance provider; also called a Medicare Advantage plan.
Medicare Part C
Prescribers and pharmacies that have a contract with the insurance provider.
In-network Providers
A percentage-based insurance plan in which the patient must pay a certain percentage of the prescription price; commonly used in high-cost specialty drugs.
Coinsurance
A patient who has both a primary and secondary insurance plan.
Dual Eligible
An insurance coverage gap in Medicare Part D programs under which the patient must pay a higher portion of the cost of the medication; to be phased out by 2019.
Donut Hole
A federal- and state-partnered insurance program that provides partial coverage of prescriptions, primarily for patients who are eligible for Medicare.
Medicare Part D
Prescribers and pharmacies that do not have a contract with the insurance provider; the cost of services is generally higher.
Out-of-network Providers
Coverage for medical or prescription costs provided by an employer or purchased by an individual; also called private insurance.
Commercial Insurance
Medically necessary, reusable equipment such as nebulizers, hospital beds, wheelchairs, and walkers that may be purchased in a community pharmacy or billed to Medicare Part B.
Durable Medical Equipment (DME)
Health insurance primarily for patients over age 65.
Medicare
A state governmental health insurance program for low-income and disabled citizens.
Medicaid
A formulary provided by an insurance company that indicates preferred prescription generic and brand name drugs and their corresponding copays.
Preferred Drug List
Online billing of both a primary and a secondary insurer to ensure the correct sequencing and processing of claims.
Coordination of Benefits (COB)
Savings accounts that can be started by patients or their employers to set aside tax-deferred money specifically for healthcare costs not covered by their insurance.
Health Savings Account (HSA)
A federally sponsored insurance plan that covers 80% of the cost of hospital stays, as well as limited coverage of skilled nursing facilities, rehabilitation, and home health care; drugs are not covered under this plan.
Medicare Part A
Government insurance program for active and retired military and their families.
TRICARE
A company that administers drug benefits for many insurance companies.
Pharmacy Benefit Manager (PBM)