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Medicare - A Detailed Guide
Part D (Prescription Drugs)

Part D plans are prescription drug policies only sold through independent insurance companies.  This coverage is not offered by the government.  They range from about $30-$175 a month, but you can typically find a suitable plan in the $30-$50 range.

If you want coverage for your prescription drugs you will need to purchase a separate Part D policy unless you have Medicare Advantage with its own prescription drug coverage.

We recommend that you get a Medicare Advantage Plan with prescription drug coverage or a Part D plan as soon as you are eligible.  If you fail to enroll in a prescription drug plan you will start to accrue a Part D penalty.  The longer you go without prescription drug coverage, the larger the penalty will become and it is triggered when you finally enroll in a prescription drug plan.  For more information on the Part D penalty see the next page.

Additionally, prescription drug plans have some gaps in coverage called "The Donut Hole."  We go over these gaps in detail in another section of this website - The Donut Hole Explained.

What Do Part D Plans Cover?

All plans must cover a wide range of prescription drugs that people with Medicare take, including most drugs in certain protected classes, like drugs to treat cancer or HIV/AIDS.  A plan's list of covered drugs is called a "formulary," and each plan has its own formulary.  Medicare drug coverage typically places drugs into different levels, called "tiers," on their formularies.  Drugs in each tier have a different cost.  For example, a drug in a lower tier will generally cost you less than a drug in a higher tier.

List Of Covered Prescription Drugs (Formulary)

Most Part D plans (Medicare 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 2 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 Part D 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 you or your prescriber (your doctor or other health care provider who's legally allowed to write prescriptions) believes none of the drugs on your plan's formulary will work for your condition, you can ask for an exception.

A Part D plan can make some changes to its drug list during the year if it follows guidelines set by Medicare.  Your 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 drug coverage under Part D may immediately remove drugs from their formularies after the 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.  If you are currently taking any of these drugs, you'll get information about the specific changes made afterwards.

For other changes involving a drug you're currently taking that will affect you during the year, your plan must do one of these:

  • Give you written notice at least 30 days before the date the change becomes effective.

  • At the time you request a refill, provide written notice of the change and at least a month's supply under the same plan rules as before the change.

You may need to change the drug you use or pay more for it.  You can also ask for an exception.  Generally, using drugs on your plan's formulary will save you money.  If you use a drug that isn't on your plan's drug list, you'll have to pay full price instead of a copayment or coinsurance, unless you qualify for a formulary exception.  All Part D plans have negotiated to get lower prices for the drugs on their drug lists, so using those drugs will generally save you money.  Also, using generic drugs instead of brand-name drugs may save you money.

Generic Drugs

The FDA says generic drugs are copies of brand-name drugs and are the same as those brand-name drugs in:

  • 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 you take, but there may be another generic drug that will work as well for you.  Talk to your doctor or other prescriber about your generic drug coverage.

Tiers

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 you less than a drug in a higher tier.

Here's an example of a Part D plan's tiers (your plan's tiers may be different):

  • Tier 1 - lowest copayment: most generic prescription drugs

  • Tier 2 - medium copayment: preferred, brand-name prescription drugs

  • Tier 3 - higher copayment: non-preferred, brand-name prescription drugs

  • Specialty Tier - highest copayment: very high cost prescription drugs

In some cases, if your drug is in a higher tier and your prescriber (your doctor or other health care provider who's legally allowed to write prescriptions) thinks you need that drug instead of a similar drug in a lower tier, you or your prescriber can ask your plan for an exception to get a lower coinsurance or copayment for the drug in the higher tier.  Plans can change their formularies at any time.  Your plan may notify you of any formulary changes that affect drugs you're taking.

Medicare drug coverage includes drugs, like buprenorphine, to treat opioid use disorders.  It also covers drugs, like methadone, when prescribed for pain.  However, Medicare Part A covers methadone when used to treat an opioid use disorder as a hospital inpatient, and Part B now covers methadone when you get it through an opioid treatment program.  Contact the plan for its current formulary, or visit the plan's website.

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