If you’re enrolled in Medicare and you want to also have prescription drug coverage, then there are two ways that you can get it. One is to purchase a stand-alone Medicare Part D plan, and the other is to choose a Medicare Advantage plan (for all of your Medicare coverage) that also offers coverage for prescription drugs.
Because Medicare Part D and Medicare Advantage plans are offered through private insurance carriers (as versus directly through Medicare itself), the coverage – as well as your out-of-pocket charges – can differ from one to another.
In fact, all Medicare prescription drug plans have their own list of covered medications. These lists are referred to as “formularies.” In addition, there are many Medicare prescription drug plans that will put drugs into different “tiers” within the formulary. The drugs that are in each tier have different costs.
Just like with most other types of health insurance coverage, Medicare prescription drug plans may have coverage rules. These can include the following:
In addition, if you receive automatic refills on your covered prescriptions, your plan may contact you before the pharmacy sends out your medication in order to ensure that the prescription is still needed. Conversely, if you have automatically received a medication that you no longer require, you may be eligible for a refund.
There can be several different tiers within a Medicare prescription drug plan. Each of these tiers indicate the level of cost-sharing between you and your plan for covered medication(s). Typically, those drugs that are in a lower tier will cost you less than drugs that are in higher tiers.
For example, Tier 1 is the lowest tier, and it is in this tier that low-cost generic prescription drugs are found. Tier 2 includes preferred generic brand name drugs. Tier 3 includes non-preferred brand name prescription drugs.
There are typically higher tiers that includes unique – and oftentimes very high cost prescription medications. Depending on which tier (or tiers) your medications fall into, it can have an impact on the amount of copay that you are responsible for.
|Tier||What You Pay||What is Covered By Your Plan||Cost Example|
|1||Lowest Copay||Most generic prescription medications||$0|
|2||Medium Copay||Preferred brand name prescription medications||$10|
|3||Higher Copay||Non-preferred brand name prescription medications||$55|
|4||Highest Copay||More expensive Non-preferred brand name prescription medications||$95|
|Specialty Tier||Higher Percentage||Unique, higher cost medications||66%|
Note that the cost example figures above are not actual costs. They are hypothetical examples of copayment / coinsurance amounts for a 30-day supply. Actual costs will vary by drug and by plan. Also note that some Medicare drug plans may have more or fewer tiers.
For some prescription medications, there may be additional coverage requirements that are in place. These can help to ensure that the medications are used in both a safe and a cost effective manner.
In many instances, it will be necessary for your doctor or other prescriber to notify your Medicare drug plan of the medical reason(s) why a particular drug is necessary, and in turn, why the plan should authorize coverage for that drug. Without the proper information, it may be that the plan will not approve coverage of the medication.
There may also be some medications that will only approve coverage up to a certain quantity or amount. In this case, if your doctor feels that you require more than the quantity or amount, then they must obtain prior approval from your drug plan.
If your Medicare prescription drug plan will cover your medication(s), but the required copayment is too high, in turn making it unaffordable, you may be able to request a tiering exception.
A tiering exception is a way that you can request a lower amount of cost sharing with your drug plan. You can initiate the tiering exception process by using the Medicare Part D appeal process. When doing so, it can also be beneficial if you include a letter from your prescribing physician that explains why similar medications on the plan’s formulary (and in lower tiers) may be ineffective – or even harmful – for you.
When receiving a tiering exception request, your Medicare prescription drug plan must respond with their decision within 72 hours of receiving the request. And, if your plan approves the tiering exception request from you, your medication will then be covered at a cost sharing amount that applies in the lower tier.
There may also be instances where step therapy is required before your Medicare drug plan will (or won’t) approve a certain medication. Step therapy is a type of coverage restriction that is placed on drug coverage by some health insurance plans. In this case, step therapy requires that you first try a particular (lower cost) medication to treat the condition before the plan will cover another medication for that same condition.
As an example, if Medication A and Medication B both treat the condition, the plan may require that your doctor prescribe you with Medication A first. Then, if that drug does not work for you, the plan will cover Medication B. Unfortunately, this “trial process” can often take several months before you and your physician find a drug that works well for you.
The Medicare drug plan may also move forward with the approval of Medication B if your doctor or other medical prescriber provides a reason and / or proof of why you cannot use Medication A for your condition.
In order to determine whether or not step therapy is required and / or if there are other restrictions, check the list of covered medications on your Medicare prescription drug plan’s formulary. If there is an S or an ST listed after the name of your medication(s), then step therapy is required. In some cases, there may be another medication that your physician can prescribe that does not require step therapy.
If you meet certain requirements, you may be able to receive additional Medication Therapy Management, or MTM, services. These services can help you to understand how to manage your prescriptions, and how to use them safely.
MTM services are usually free of charge for those who qualify, and they will often include a discussion with a pharmacist and / or other health care provider who will review all of your medications and talk with you about how well they are working, whether or not they cause you any side effects, whether or not the cost(s) may be lowered, and / or any other issues that you may be having.
Because Medication Therapy Management services may or may not be offered in your plan – and because MTM can differ from one plan to another – it is important to contact your Medicare prescription drug plan in order to determine what you may be eligible for.
Throughout the year, it is possible for Medicare prescription plans to make certain changes to their drug formularies. In doing so, however, the plan will have to stay within certain guidelines that are set by Medicare.
If one of the medications that you are currently taking has a change, then your Medicare prescription drug plan is required to do one of the following:
Having a good understanding of how Medicare prescription drug plans work is essential, as knowing where your medication falls on your plan’s formulary can allow you to anticipate how much you may need to pay out-of-pocket, and how much your plan will cover. It is important to have all of your questions answered before you commit to any Medicare plan, because there may be penalties for canceling or changing your coverage. You can also discuss your options with an independent agent who specializes in Medicare plans.
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Author Bio: Ben started Prepare for Medicare in 2014 to help people help people get objective answers to questions about Medicare. He’s held leadership roles at numerous Fortune 500 Medicare health insurers in product development, sales, marketing and strategy for over 20 years.