What is a prescription drug plan formulary?

Mike Olmos by Mike Olmos | Licensed since 2010
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This article was updated on: 09/15/2018

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If you have a stand-alone Part D Prescription Drug Plan or a Medicare Advantage prescription drug plan from a private insurance company, you may assume that all your prescription drugs will be covered. One way to know in detail what prescription drugs your plan covers is to check the plan’s formulary. A formulary is simply a list of covered prescription drugs. If your prescription drug is not on the plan formulary, you may have to pay for it 100% out-of-pocket. You can usually get a copy of the formulary by calling your plan or looking on your plan’s website. If you are looking online, be aware that a formulary may also be called a “drug list” or a “prescription drug guide.”

Medicare formulary tiers

The amount you pay for a prescription drug may depend on which tier your drug is on and whether you fill your prescription at a network pharmacy. A Medicare formulary may categorize prescription drugs into five tiers:

  • Tier 1– preferred generic: These are the prescription drugs that typically have the lowest cost share for you.
  • Tier 2 – generic: These prescription drugs usually have a higher cost share than tier 1 drugs.
  • Tier 3 – preferred brand: These prescription drugs are lower in cost than tier 4.
  • Tier 4 – non-preferred drugs: these prescription drugs are lower in cost than tier 5
  • Tier 5 – specialty: these are the highest cost drugs, including some injectables

Your plan may let you know when your prescription drug is moved to a higher cost-sharing tier.

Medicare formulary requirements

Although Medicare Part D formularies vary, they must all cover certain categories. One category is:

  • All commercially available vaccines medically necessary to prevent illness (except those covered by Medicare Part B). These could include the shingles vaccine, the pneumonia vaccine, the tetanus vaccine and more. This means if your doctor recommends a vaccine for you, it will typically be covered by your Part D plan.

Part D plans must also cover all or substantially all:

  • Immunosuppressants (to prevent organ transplant rejection)
  • Antidepressants (to treat depression)
  • Antipsychotics (to treat mental health disorders)
  • Anticonvulsants (to treat seizures)
  • Antiretrovirals (to treat HIV/Aids)
  • Antineoplastics (to inhibit growth and spread of precancerous cells, cancer cells, or tumors)

This means that if you are about to get an organ transplant, if you are suffering from depression or other mental health conditions, if you have seizures or an HIV infection, or if you need certain types of treatment for a precancerous condition, some of your medications will usually be covered by your Part D plan.

Medicare formulary changes

A formulary may change from time to time but the plan must inform you when the change affects you. Usually the plan will inform you in advance to the change so you are not suddenly left without your medications. A formulary may change when a new more cost-effective prescription drug comes to market or when new safety information about a prescription drug is released. Sometimes a plan will let you continue to fill prescriptions for a prescription drug removed from the formulary throughout the period of the coverage year if you are already taking it. Medicare Prescription Drug Plans are restricted from making changes to the listed drugs between the beginning of the plan’s annual election period until 60 days after the plan coverage begins. However, if the Food and Drug Administration (FDA) decides your prescription drug is unsafe or the manufacturer removes the prescription drug from the market, the plan may remove it from the formulary immediately.

Prescription drugs not included in the Medicare formulary

If your prescription drug is not covered by your plan’s formulary, you have some options. You can contact the plan and ask them for a list of similar prescription drugs they do cover. You can bring the list to your doctor and ask him or her to prescribe a similar drug that is covered by your plan’s formulary.

You also can ask for an exemption that prescription drug be covered even if it’s not on the Medicare formulary. The plan may approve an exemption if other prescription drugs included on the formulary are less effective in treating your health condition and/or would cause adverse side effects.

If you’d like more information about Medicare Prescription Drug Plans, I’m happy to answer your questions. To request personalized information via email or schedule a return telephone call, click the appropriate link at the bottom of the page. You can also view plans in your area by clicking the “Compare Plans” button.

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