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Medicare Part D Considerations

What Medicare Part D drug plans cover


A wide range of prescription drugs that people with Medicare take are generally covered in Medicare Part D drug plans.  A plan will have a list of covered drugs that is called a “formulary”, each plan establishing its own formulary.  Within a Medicare drug coverage “formulary”, drugs are typically placed into different levels call “tiers”.    Drugs will have a different cost in each tier.  A drug found in a lower tier will usually cost you less than a drug in a higher tier.

List of covered prescription Drugs (formulary)

Most Medicare drug plans (Medicare drug plans and Medicare Advantage Plans with prescription drug coverage) will create their own list of covered drugs and refer to this list as a formulary.   Brand-named prescription drugs along and generic drugs are generally both included in the plan coverage.

If your specific drug is not found in a formulary, in most cases, a similar drug should be available.

A Medicare drug plan that follows guidelines set by Medicare can make some changes to its drug list during the year.  These changes may happen because drug therapies change, new drugs become available, or new medical information is presented.

In most cases, using drugs on your plan’s formulary may save you money.  Usage of drugs not found on your plan’s drug list may end up costing you more unless you qualify for a formulary exception.

Costs in the coverage gap

Generally, Medicare drug plans have a coverage gap (also called the "donut hole"). This means there can be a temporary limit on what the drug plan will cover for drugs.

Not everyone will enter the coverage gap. The coverage gap usually begins after you and your drug plan have spent a certain amount for covered drugs.

Medicare Part D restrictions and limitations  

​Some prescription drug plans may have restrictions on certain medications.

These restrictions may include:

1) Prior authorization:  An approval from your plan may be necessary before your doctor can prescribe some medications.  This might happen because a drug is only approved for certain conditions, or to confirm that the drug is medically necessary. 

2) Step therapy:  Step therapy is a type of prior authorization.  Depending on your condition, your plan may require you to first try a less expensive drug on your formulary that’s been proven effective.  If the cheaper medication is less effective for your condition, you may be able to move up a step to a more expensive drug.

3) Quantity limits:  Plans may in some situations, limit the amount medication prescribed over a period of time.  Perhaps due to safety reasons or to control costs. 

Tips for choosing Medicare drug coverage

​If you’re wondering how to choose a Medicare drug plan that works for you, one way is to start by looking at your priorities. See if any of these apply to you:

Usage of specific drugs:  Explore drug plans that include your prescription drugs on their formulary (a list of prescription drugs covered by a drug plan).  Compare costs.

I want extra protection from high prescription drug costs:  Examine drug plans that offer coverage in the coverage gap.  Check with those plans to confirm they cover your drugs in the gap.

Drug expenses need to be balanced throughout the year:  Examine drug plans with no or a low deductible, or provide additional coverage in the coverage gap.

I take a lot of generic prescriptions:   Explore Medicare drug plans with “tiers” that charge you nothing, or a small amount, or have low copayments for generic prescriptions.

I want to select a specific Pharmacy:    Generally, Medicare drug plans may have contracts with "network pharmacies."  In some cases, “network pharmacies” may have agreed to provide discounted prices for services and supplies to members of certain Medicare plans.   In some cases, your prescriptions may only be covered if you get them filled at “network pharmacies” in some Medicare plans. 

In situations where a Medicare Drug plan has preferred pharmacies, out-of-pocket prescription drug costs such as copayment or coinsurance may be less expensive at a preferred pharmacy because it has agreed with your plan to charge less.

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