Navigating the world of Medicare can be difficult, especially when there are a lot of complicated terms to remember.

Here we’ve outlined and explained some of the most common Medicare Part D terms you will come across when reviewing plans and prescription coverage. If you need more help with Medicare terminology, make sure you visit our article on general Medicare terms.

Common Medicare Part D Terms

Coverage determination: The first decision made by your Medicare drug plan (not the pharmacy) about your drug benefits, including:

• Whether a particular drug is covered
• Whether you have met all the requirements for getting a drug
• How much you’re required to pay for a drug
• Whether an exception to a plan rule can be made based on your request

Note: The drug plan must give you a prompt decision. (72 hours for standard requests, 24 hours for expedited requests.) If you disagree with the plan’s coverage determination, the next step is an appeal.

Coverage gap (“donut hole”): A period of time in which you may pay a higher cost sharing rate for prescription drugs until you spend enough to qualify for catastrophic coverage. The coverage gap starts when you and your plan have paid a set dollar amount for prescription drugs during that year.

Drug list (formulary): A list of prescription drugs covered by a prescription drug plan or another insurance plan.

Exception: A type of Medicare prescription drug coverage determination. A formulary exception is a drug plan’s decision to cover a drug that’s 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 or your prescriber can request an exception, and your doctor or other prescriber must provide a supporting statement explaining the medical reason for the exception.

Extra Help: A Medicare program to help people with limited income and resources pay Medicare prescription drug program costs, like premiums, deductibles and coinsurance.

To learn more about Medicare Part D and your prescription coverage options, download our prescription coverage guide.

Last Updated On: 8.28.25 at 1:00 PM