Under the Medicare Prescription Drug Program,a Coverage Gap (Also Called

question 45

Multiple Choice

Under the Medicare Prescription Drug Program,a coverage gap (also called a "donut hole") exists after the beneficiary and drug plan pay a certain amount for covered drugs.The coverage gap refers to

• A)the large,up-front deductible that must be satisfied if the patient has a prescription for a covered brand-name drug.
• B)the temporary gap in coverage that begins when the beneficiary and drug plan pay a certain amount for covered drugs during the year and ends when the catastrophic limit is reached and coverage resumes.
• C)the temporary gap in coverage that begins after beneficiaries reach the lifetime limit on catastrophic drug expenses and ends when a new deductible is met and coverage resumes.
• D)the temporary gap in coverage that begins when prescription benefits terminate for beneficiaries who attain age 68 and resumes when beneficiaries attain age 72.

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Definitions:

Opportunity Costs

The cost of the most favorable alternative that is lost by deciding on a particular option.

Returns to Scale

The change in output resulting from a proportional change in all inputs used in the production process.

Long-Run Average Cost

is the average cost per unit of output achieved when all factors of production, including capital, are variable, often represented by a curve showing economies of scale.

Production Costs

The expenses incurred in the process of creating a product or service, including materials, labor, and overhead.