The drugs covered under Medicare prescription (also known as Medicare Part D) plans can vary from carrier to carrier, so it is important to research each policy’s formulary – a list of covered prescriptions – as well as where the medications you need fall in the tiers of the formulary.
It is also important to be aware that all Medicare Part D plans are required to make medically necessary drugs accessible to the policyholders who need them to treat their conditions. While the exact medication you take may not be included in your policy’s formulary, in most cases you can find a drug that will be just as effective in treating your associated medical condition.
When designing insurance plans, many Medicare Part D underwriters divide drugs into tiers on their formularies, designating a different cost level for each tier. In general, medications in the higher tiers cost more than those in the lower tiers. However, tiers can be structured in different ways for each policy.
Following is an example of what a typical Medicare Part D drug tier structure may look like:
- Tier 1 – Generic drugs
- Tier 2 – Preferred brand name drugs
- Tier 3 – Non-preferred brand name drugs.
In order to receive approval from the Food and Drug Administration, generic drug makers must prove that their product performs the same way as the corresponding brand name drug. Generic drugs use the same active ingredients as brand name drugs to achieve desired results.
Preferred brand name drugs are medications manufactured by one manufacturer that are typically lower-cost among all brand-name drugs. This is partly because these medications have been in the market for some time and are widely accepted.
Non-preferred brand name drugs, on the other hand, tend to cost more because they have just recently been introduced to the market. You may have heard the term “designer drugs.” These high cost drugs fall into the same category.
You can obtain additional information on Medicare Part D here.