Find a Medicare Plan

Contact Us

You can always talk to us. We'll call you, or send you information in the mail — however you'd like us to reach you!

Understanding Common Medicare Terms

Term Definition
Annual Enrollment Period (AEP) October 15 through December 7. During this time beneficiaries can disenroll from, switch, or enroll into a Medicare Advantage plan or Part D only plan.
Benefit A financial payment made by the health plan for your services or drugs covered under the plan.
Benefit Period A benefit period begins the first day you stay in a hospital or skilled nursing facility and ends when you have been out of the hospital or skilled nursing facility for 60 days in a row. If you go into the facility after one benefit period has ended, a new benefit period begins. There is no limit to the number of benefit periods you can have.
Catastrophic Coverage Once your total drug costs reach $4,750, you will pay a lower coinsurance or a lower copayment for covered drug costs for the rest of the calendar year.
Coinsurance The percentage of your health care costs that you are responsible for paying. For example under Original Medicare, you pay 20 percent of the cost of a doctor's office visit. If the charges are $200, your coinsurance would be $40.
Copay A flat fee that you are required to pay for a medical service or prescription drug. For example, you might pay $30 for a doctor's office visit under your plan.
Cost Sharing A term for the costs that members are accountable to pay. The most common types of cost-sharing are deductibles, copays and coinsurance. You pay the deductible, copay and/or coinsurance and your plan covers the rest of the expense.
Coverage The costs that your insurance company or Medicare pays for your medical services or prescription drugs.
Coverage Gap Commonly referred to as the "donut hole". The coverage gap occurs after your total covered prescription drug costs reach $2,970 and continues until the total you pay out of your pocket for covered Part D prescription drugs reaches $4,750. This amount includes your annual deductible and copayments or coinsurance for covered prescription drugs (excluding premium). Once you reach $4,750 in total out-of-pocket spending, you'll enter the next phase called catastrophic coverage.
Covered Services A medically necessary service or supply shown in the Evidence of Coverage for which benefits may be available.
Creditable Coverage Prescription drug coverage offered by a plan, other than a Part D plan, that is as good as or better than the minimum benefit standard required by Medicare. If you are currently enrolled in a plan that provides drug coverage, that plan is required to tell you if it meets these standards for creditable coverage.
Back To Top ^
Deductible The amount of your medical or prescription drug expenses that you must pay for yourself each year before your plan starts to pay. For example, a plan may require you to pay $250 of your drug expenses before the plan pays anything during the calendar year.
Donut Hole See Coverage Gap.
Durable Medical Equipment Medical equipment that is ordered by a doctor for use in the home. These items must be reusable, such as walkers, wheelchairs or hospital beds. Durable Medical Equipment is paid for under both Medicare Part B and Part A for home health services.
Back To Top ^
Exclusions Items that are not covered by a health plan. Health plans may exclude certain prescription drugs or medical services.
Explanation of Benefits (EOB) A statement from your insurance company that shows what your plan has paid for medical services on your behalf and what you should owe your health care provider. For plans that include prescription drug coverage, you will receive a separate EOB that lists your drug purchases for the month. This EOB will help you know when you have met your deductible (if applicable), your Initial Coverage Limit, and your Catastrophic Coverage Threshold.
Back To Top ^
Formulary A list of prescription drugs covered by a Part D plan. The formulary may consist of multiple tiers or levels of coinsurance or copays you are required to pay.
Back To Top ^
Generic Drugs Prescription drugs that have the same active ingredient formula as brand name drugs. Generic drugs usually cost less than brand name drugs. They are also rated by the Food and Drug Administration (FDA) to be as safe and effective as their brand name counterparts.
Back To Top ^
Income-Related Monthly Adjustment Amount (IRMAA) If your modified adjusted gross income as reported on your IRS tax return is more than $85,000 (individuals and married individuals filing separately) and $170,000 (married individuals filing jointly), you will have to pay extra for your Medicare prescription drug coverage. This extra amount is called the Income-Related Monthly Adjustment Amount (IRMAA). You will have to pay this extra amount in addition to your monthly Part D plan premium.
Initial Coverage Limit The first phase of your prescription drug coverage. Your drug costs between $0 and $2,970, including your out-of-pocket costs (such as deductibles and copays or coinsurance) and what your plan pays for your medications.
Initial Election Period (IEP) The seven-month period surrounding your Medicare eligibility that includes three months before, the month of, and three months after the event that qualifies you for Medicare.
Back To Top ^
Late Enrollment Penalty (LEP) The late enrollment penalty is an amount added to your Part D premium. You may owe a late enrollment penalty if, at any time after your initial enrollment period is over, there is a period of 63 or more days in a row when you don't have Part D or other creditable prescription drug coverage.
Low-Income Subsidy (LIS) If you meet certain income and resource limits, you may qualify for Extra Help from Medicare to pay the costs of Medicare prescription drug coverage. Learn more.
Back To Top ^
Medicaid The state's medical assistance program for low-income people. In Tennessee, this program is called TennCare.
Medicare The federal health insurance program for people 65 years of age or older, certain people with disabilities, and people with End-Stage Renal Disease (permanent kidney failure with dialysis or a transplant, sometimes called ESRD).
Medicare Advantage Disenrollment Period (MADP) January 1 through February 14 of every year. During this time you can leave a Medicare Advantage plan and return to Original Medicare. You will then qualify for a Special Election Period (SEP) to join a Part D plan. You cannot join or switch Medicare Advantage plans during this time. Changes that you make during the Medicare Advantage Disenrollment Period go into effect the first day of the following month.
Medicare Advantage Plan A Medicare program that gives you more choices among health plans. Everyone who has Medicare Parts A and B is eligible if they reside in the service area of the plan, except those who have End-Stage Renal Disease (unless certain CMS exceptions apply).
Medicare-Allowed Amount The amount of money Medicare will pay a provider for a particular covered service.
Medicare Beneficiary A person who is eligible for the Medicare program because he or she is 65 years or older or has a qualifying disability.
Medicare Limiting Charge The highest amount of money you can be charged for a covered service by doctors and other health care providers who don't accept the Medicare payment in full. The limiting charge is 15 percent over Medicare's approved amount. The limiting charge only applies to certain services and doesn't apply to supplies or equipment.
Medicare Modernization Act The legislation passed by Congress and signed by President George W. Bush creating the Medicare Part D prescription drug benefit. This law preserves and strengthens the current Medicare program and adds important preventive benefits. It also adds a prescription drug benefit (Medicare Part D) that Medicare beneficiaries may purchase from a private insurer. In addition, the legislation provides Extra Help to people with low incomes.
Medicare Part A Part of Original Medicare managed by the federal government. It helps cover some, but not all, of the expenses you incur for inpatient hospital care or medical care that you may receive at a skilled nursing facility (not a custodial care facility). Some hospice care and some home health care are also covered. Limitations apply, and you will have deductibles, copays, or other costs to satisfy.
Medicare Part B Part of Original Medicare managed by the federal government. This helps cover medically necessary services from doctors or outpatient hospital care. It also helps with costs associated with some physical and occupational therapist services and some home health care services. You typically must sign up for Part B and pay a monthly premium in order to benefit from that coverage.
Medicare Part C This part of Medicare includes medical and other benefits provided through private companies (with a Medicare approved contract) known as Medicare Advantage plans. A Medicare Advantage Plan covers the same benefits as Original Medicare and typically includes additional benefits not covered by Original Medicare. You can choose a Medicare Advantage plan that includes Medicare prescription drug coverage (MA-PD) or one that does not (MA). Learn more about BlueCross BlueShield of Tennessee Medicare Advantage plans.
Medicare Part D The name sometimes used to describe the optional Medicare prescription drug coverage that helps with your prescription drug costs. This coverage is available as a stand-alone Medicare Prescription Drug plan (PDP) or as part of a Medicare Advantage plan (MA-PD). Learn more about BlueCross BlueShield of Tennessee plan options.
Medicare Supplement or Medigap Plan A plan offered by private insurance companies to pay the beneficiary's out-of-pocket expenses such as Medicare Part A and B deductibles and coinsurance amounts. The beneficiary's medical claims are paid by Original Medicare first and the Medicare Supplement plan second. Learn more about BlueCross BlueShield of Tennessee Medicare Supplement plan options.
Back To Top ^
Network This means we have a contract with that doctor or other health care provider. We negotiate discounted rates with them to help you save money. As a result, you can save more money by using doctors, other health care providers, and pharmacies that are in network.

There are other benefits to using doctors in network. They won't bill you for the difference between their standard rates and the rate they've agreed to with us. All you have to pay is your coinsurance or copay, along with any deductible. And network doctors will handle any precertification your plan requires.
Non-Preferred Brand Drugs A brand-name drug that is covered by your formulary but may not be as cost-effective as similar preferred brand drugs.
Back To Top ^
Open Enrollment Period for Institutionalized Individuals (OEPI) The Open Enrollment Period for Institutionalized Individuals is continuous. An institutionalized beneficiary going into, residing in or leaving an institution can make any number of Medicare Advantage elections into a plan that is open for elections.
Out-of-Network Doctor A doctor with whom we do not have a contract. If your plan allows you to receive covered services from a doctor or other health care provider who is out of network, your cost sharing may be higher.
Out-of-Network Pharmacy A pharmacy with which we do not have a contract. Most drugs you get from out-of-network pharmacies are not covered by our plan unless certain conditions apply.
Out-of-Pocket Costs The amount you must pay out of your own pocket for your medical or prescription drug expenses. These costs include things like deductibles, coinsurance or copays.
Out-of-Pocket Maximum Some plans set a maximum limit on your out-of pocket costs for your medical expenses. This amount is the maximum you will have to pay in that calendar year for your medical expenses. Once you reach the out-of-pocket maximum, your plan pays 100 percent of your covered expenses.
Back To Top ^
Pre-Existing Condition A condition for which medical advice was given or treatment recommended by or received from a physician prior to enrolling in a health plan.
Preferred Brand Drugs Brand-name drugs that are medically sound, cost-effective alternatives to higher-priced drugs.
Preferred Provider Organization (PPO) PPO plans offer a network of doctors and hospitals. You are free to use out-of-network providers for covered services, but it may cost you more. Deductibles, coinsurance and limitations apply to out-of-network services. Therefore you can maximize your benefits by using providers in the network. There is no need to select a primary care physician and you do not need a referral to see an in-network specialist.
Premium The monthly payment you make to a health solutions company like BlueCross BlueShield of Tennessee for your health insurance policy.
Preventive Service A service such as a cancer screening or a flu vaccine that is given to prevent or detect a condition at an early stage.
Prior Authorization Before performing some medical services or prescribing certain drugs, your doctor must notify your insurance plan. If the service or drug meets the plan's medical policy, it will be covered under your plan. If not, an alternate service or drug may be used.
Provider This term refers to any doctor, practitioner, hospital, facility or pharmacy that provides you with medical services or prescription drugs.
Back To Top ^
Quantity Limits Assigned to medications that are frequently taken in an inappropriate manner or used in amounts that exceed recommendations for dosage or length of treatment. Limits are based on Federal Medication Administration (FDA) and pharmaceutical manufacturer recommendations.
Back To Top ^
Service Area Reduction This term refers to a situation where a Medicare Advantage or Medicare Part D plan is no longer offered in a portion of the geographic area it served the previous year. As a result, members who live in the area that has been eliminated will be disenrolled from the plan. This qualifies the member for a Special Election Period.
Skilled Nursing Facility A facility that provides inpatient skilled nursing care, rehabilitation services or other related health services. "Skilled nursing" does not include a convalescent home or custodial care.
Special Election Period (SEP) An election period that allows a Medicare beneficiary to make a plan change or selection outside of the typical yearly election periods. Individuals qualify for SEPs when a special circumstance occurs, such as moving out of your plan's service area or becoming eligible for Medicaid.
Specialty Drugs Certain highly-specialized drugs that require special handling and administering by the patient or provider.
Standalone Medicare Part D Prescription Drug Plan A plan that covers just prescription drug benefits for Medicare Part D-approved drugs.
Step Therapy Some health or prescription drug plans may require you to try a drug on a lower tier first. If the lower tier drug does not work, you may advance to a higher tier drug.
Back To Top ^
Tier A tier is a copay or coinsurance level that applies to drugs on the plan's formulary.
True Out-of-Pocket (TrOOP) The Medicare-defined amount of out-of-pocket cost before moving into the catastrophic phase of the plan. Once that amount is reached, your prescription cost sharing will change to the catastrophic coverage phase. This amount can change from year to year.

Your true out-of-pocket costs must reach $4,750 before you enter the catastrophic phase.

TrOOP expenses include your yearly prescription drug deductible, copayments or coinsurance for covered prescription drugs, and what you pay during the coverage gap. Your Medicare prescription drug plan premium and costs for prescription drugs that aren't covered by the plan do not count toward this limit.
Back To Top ^
Value-Added Item or Service The products and services that are not part of your medical or prescription drug benefits. These products and services are not offered nor guaranteed under the plan's contract with the Medicare program. In addition they are not subject to the Medicare appeals process. Any disputes regarding these products and services may be subject to BlueCross BlueShield of Tennessee's grievance process.
Back To Top ^