What prescription drug costs does Medicare Part D cover?
Understanding your Medicare Part D coverage
Medicare Part D is administered through private insurance companies, and each insurer’s plan may provide different prescription drug coverage. In other words, you may pay varying out-of-pocket expenses for the same drug across different plans. It’s important to note your actual Part D plan costs will depend on:
- The prescription drugs you use
- The plan you choose
- Whether you go to a pharmacy in your plan’s network
- Whether the drugs you use are on the plan’s formulary
What’s a tier?
The different levels of prescription drug coverage under Medicare Part D plans are split into tiers. They represent how much you pay out of pocket for the drugs listed in each tier. Each plan can divide its tiers in different ways, and each tier has a different cost. For instance, tier 1 has the lowest copayment and includes most generic prescription drugs. Tier 2 can include preferred, brand-name prescription drugs, and a specialty tier typically has a higher copayment for high-cost prescription drugs. Remember, each plan’s tiers may be different.
What does formulary mean?
Another important thing to review before enrolling in a Medicare Part D prescription drug plan is the formulary — the list of drugs each plan covers. Both brand-name and generic prescription drugs are included in the plans. That means that if the formulary doesn’t include your specific drug, in most cases, a similar drug should be available. Before you choose a plan, make sure your current medications are covered.
While you’re looking at a plan’s formulary, you may see three phrases that are important to understand because they involve Medicare Part D’s coverage of prescription drug costs.
Prior authorization: This means that before your Part D insurer will cover a particular drug, you must, with your doctor’s help, get approval from your insurer. If you do not receive approval, your drug may not be covered.
Step therapy: This means that in some cases, your plan may require you to try a clinically effective, lower-cost drug before it covers the more expensive drug. If the lower-cost drug does not work for you, your doctor can request coverage of the more expensive drug.
Quantity limits: This means that the plan has a restriction on the amount of medication that is covered during a specific period of time, based on dosing guidelines and medical best practices.
However, there are certain drug categories you won’t find on any formulary lists covered by Medicare Part D:
- Weight loss or weight gain drugs
- Drugs for cosmetic purposes or hair growth
- Fertility drugs
- Drugs for sexual or erectile dysfunction
- Over-the-counter drugs
Before you enroll in a plan, do your research to find out which prescription drug costs Medicare Part D covers. It’s also always in your best interest to ask your doctor to prescribe medications that are on your Medicare plan’s formulary, which can be found on the plan’s website.
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