Medicare Glossary

Catastrophic Coverage

The phase of Medicare Part D drug coverage that begins after you and your plan have spent a certain total amount on covered drugs in a year. In this phase, your copays are significantly reduced. In 2025, out-of-pocket costs are capped at $2,000 annually.

Copay (Copayment)

A fixed dollar amount you pay for a covered health care service at the time of service. For example, a $20 copay for each doctor's visit. The amount can vary by the type of service and whether you are in-network.

Also known as: Copayment, Fixed cost share

Cost-sharing

The share of costs covered by your insurance that you pay out of your own pocket. This term generally includes deductibles, coinsurance, and copays — but not premiums.