Medicare’s prescription drug benefit (Part D) is the part of Medicare that provides outpatient drug coverage. Part D is provided only through private insurance companies that have contracts with the federal government. It is never provided directly by the government, unlike Original Medicare. Plans can vary the list of prescription drugs they cover (called a formulary) and how they place drugs into different “tiers” on their formularies.
The patient may have creditable drug coverage from employer or retiree insurance. In that case, the patient doesn’t need to enroll in a PDP until they lose this coverage. Some people already enrolled in certain low-income assistance programs may be automatically enrolled in a Medicare drug plan and receive additional financial assistance paying for their medicines.
List of Covered Prescription Drugs (Formulary)
Most Medicare drug plans (Medicare Prescription Drug Plans and Medicare Advantage Plans with prescription drug coverage) have their own list of what drugs are covered, called a formulary.
- Plans include both brand-name prescription drugs and generic drug coverage. The formulary includes at least two drugs in the most commonly prescribed categories and classes. This helps make sure that people with different medical conditions can get the prescription drugs they need. All Medicare drug plans generally must cover at least 2 drugs per drug category, but plans can choose which drugs covered by Part D they will offer.
- The formulary might not include your specific drug. However, in most cases, a similar drug should be available. If a patient or prescriber (doctor or other health care provider who’s legally allowed to write prescriptions) believes none of the drugs on plan’s formulary will work for the patient’s condition, it can ask for an exception.
- A Medicare drug plan can make some changes to its drug list during the year if it follows guidelines set by Medicare. The plan may change its drug list during the year because drug therapies change, new drugs are released, or new medical information becomes available.
- Plans offering Medicare prescription drug coverage under Part D may immediately remove drugs from their formularies after the Food and Drug Administration (FDA) considers them unsafe or if their manufacturer removes them from the market. Plans meeting certain requirements also can immediately remove brand name drugs from their formularies and replace them with new generic drugs, or they can change the cost or coverage rules for brand name drugs when adding new generic drugs.
The Food and Drug Administration (FDA) says generic drugs are copies of brand-name drugs and are the same as those brand-name drugs in a dosage form; safety; strength; route of administration; quality; performance characteristics; intended use.
Generic drugs use the same active ingredients as brand-name prescription drugs. Generic drug makers must prove to the FDA that their product works the same way as the brand-name prescription drug. In some cases, there may not be a generic drug the same as the brand-name drug patient generally takes, but there may be another generic drug that will work as well for them.
To lower costs, many plans offering prescription drug coverage place drugs into different “tiers” on their formularies. Each plan can divide its tiers in different ways. Each tier costs a different amount. Generally, a drug in a lower tier will cost less than a drug in a higher tier. Here’s an example of a Medicare drug plan’s tiers (patient’s drug plan’s tiers may be different)
- Tier 1 (lowest co-payment): most generic prescription drugs
- Tier 2 (medium co-payment): preferred, brand-name prescription drugs
- Tier 3 (higher co-payment): non-preferred, brand-name prescription drugs
- Specialty tier (highest co-payment): very high-cost prescription drugs
In some cases, if the drug is in a higher (more expensive) tier and prescriber thinks patients need that drug instead of a similar drug on a lower tier, the patient can file an exception and ask your plan for a lower co-payment.
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