Understanding Your Prescription Insurance: MOOP, MAB, Deductibles Definitions

The Basics

Very few people read the literature that comes in the mail regarding their prescription benefits. First things first, start reading it! Not only will it save you headaches later, it will allow you to maximize your benefits and save you money.

This literature usually comes in the form of a benefits booklet or packet that is mailed to your home. It will summarize your prescription and medical plans. I will only cover prescription plans in my hubs. These booklets will give you the breakdown on the things that are allowed on your plan, the copays and coverage provided by your plans, id cards, and services provided.

It can be a lot to digest and usually hard to understand. This is why you have a customer service number on your id card. Call that number and get your questions answered.

Deductibles

Definition: The amount of money the participant is required to pay out of pocket at 100% of the cost, before the insurance benefits go into effect. This is an amount that is determined by your plan. 

This is a word you probably know very well if you have prescription insurance. It is wise to know if you have a deductible on your prescription plan, because you must pay that amount, full cost of your prescriptions until met. Once you meet that amount your copays or prescription coverage will start. Not all plans have a deductible, but it is good to know if you have one, so you can prepare for the costs of your prescriptions.

High deductible plans - Usually these plans have a lower premium, which makes them appealing to consumers looking for the lowest monthly rates for their plans. However, it means you must pay more out of your pocket before your insurance will pick up any claims. Be aware of what you are getting yourself into. Its best to evaluate your prescription needs before making a decision solely based on premium costs.

MOOP: Maximum Out of Pocket

Definition: Maximum amount that must be paid out-of-pocket toward prescription costs. Once the MOOP has been met, all prescription costs are covered at 100%. Not all plans have an applicable MOOP.

This is a good thing to know about your prescription plan. Think of it as a payment bank. Everything you pay out of your pocket gets pooled to the total amount the plan has set. So if you have a MOOP of $1000.00, you pay that much towards your prescriptions and once you meet that amount, everything else is free as far as prescriptions are concerned.

MAB: Maximum Allowable Benefit

 Definition: Maximum amount that will be covered, during a specified time frame, under your prescription plan. Once the MAB has been reached, the participant must pay all prescription costs. Not all plans have a MAB.

This is a very important thing to know. If your prescription plan has a MAB, you should be mindful of what your limit is and how much you have already used. Some plans have lifetime MAB or annual MAB. This is the opposite of a MOOP. This is what how much your plan will pay before you have to foot the entire bill for prescriptions.

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