Stand-alone Medicare Part D Prescription Drug Plans and Medicare Advantage plans with prescription drug coverage all have lists of covered prescription drugs called “formularies”. Usually prescription drugs in the formulary are grouped into separate tiers, or benefit categories, according to drug costs.
What does a drug formulary cover?
Medicare requires that each drug formulary includes at least two medications in the most commonly prescribed drug categories (for example, antibiotics or statins) whenever possible, but each drug plan’s formulary may list different medications.
All Medicare Prescription Drug Plans are required to cover certain drugs in these protected classes: antipsychotics, antidepressants, anticonvulsants, immunosuppressants, cancer, and HIV/AIDS drugs. However, Medicare prescription drug plans don’t cover every possible drug, and among the medications Medicare does not cover are drugs for weight loss or gain, vitamins, drugs for cosmetic purposes, drugs for sexual or erectile dysfunction, and over-the-counter medications.
Medicare plans providing prescription drug coverage may negotiate discounted prices for the covered medications in their formularies. Plans may have a network of preferred retail pharmacies, which may offer lower prices, and mail-order pharmacies, which may fill maintenance medications at a lower out-of-pocket cost. Before choosing a stand-alone Part D Prescription Drug Plan, or a Medicare Advantage Prescription Drug plan, you may want to check that your current medications are included in the plan’s formulary. If so, you may want to make note of the tier in which your medications appear. You may also want to make note of which local pharmacies are in the plan’s network.
What are drug formulary tiers?
Most Medicare plans providing prescription drug coverage separate the medications they cover into four or five drug formulary tiers. These groupings run from least expensive cost-sharing for plan members to most expensive. For example, a plan with five drug formulary tiers might have these levels:
- Tier 1 — Preferred generic drugs, lowest cost-sharing
- Tier 2 — Non-preferred generic drugs
- Tier 3 — Preferred brand-name drugs
- Tier 4 — Non-preferred brand-name drugs
- Tier 5 — Specialty drugs, highest cost-sharing
To get the most out of your prescription drug coverage, note where your prescriptions fall within your plan’s drug formulary tiers and ask your doctor or prescriber for advice. Often you’ll save money by using generic drugs, which are required by the Food and Drug Administration (FDA) to perform the same as brand-name drug counterparts.
If your doctor or prescriber thinks you need a specific medication from a more expensive tier, instead of a similar one in a less expensive tier, you can file for an exception and ask your plan if it will consider giving you lower cost-sharing for that drug.
If you require a medication that is not available in your plan’s formulary, you can ask the plan for an exception. Your doctor or prescriber will need to provide a supporting statement explaining the medical reason for the request.
Can a drug formulary change?
A Medicare prescription drug plan may change its drug formulary, but it usually has to notify you if a medication you’re taking will be affected. An exception is if a drug is taken off the market by the FDA — no advance notification may be required, although you can expect the plan may contact you or your prescribing physician.
Before the Annual Election Period (between October 15 and December 7 of each year), you may want check to see if your plan’s drug formulary has changed. You should receive two documents, an Annual Notice of Changes and the Evidence of Coverage for the coming plan year that explain any changes to your benefits. You may contact your plan’s Customer Service Department if you have questions. This may help you decide whether or not to switch plans so you can manage your prescription costs for the coming year.
This information is provided for educational purposes only. It is not to be used for medical advice, diagnosis or treatment. Consult your doctor if you have questions or concerns.