If you’re in the market for a Medicare Part D prescription drug plan, then you know just how confusing the choices can be. It can be particularly frustrating if you’re already on a medication to treat a chronic or life-threatening illness and you’re trying to find out if the drug you’re on is going to be covered by the plan or plans you’re interested in. The best way to know if your drug is covered is by checking the drug plan’s formulary, which is the official name for the list of drugs each plan will pay for.
Medicare Prescription Drug Plans: How Formularies Work
The goal of a formulary isn’t to make deciding on a drug plan difficult; it’s to identify drugs that are both medically appropriate and cost effective so that they serve the best interests of the members of the plan. The private companies that offer Medicare plans with prescription drug coverage decide which drugs to include on the formulary – generic and brand name – for each plan. They are required by the government to include most types of drugs Medicare recipients use. The formularies themselves are divided into tiers, or groups, of drugs based primarily on cost. An individual plan’s formulary may have any number of tiers from two to six. Generally, the lowest-tier drugs are the least expensive, often as a result of the plan negotiating with the drug companies for favorable prices for these drugs. These drugs are usually referred to as “preferred generic drugs” and have the lowest copayments. Drugs in higher tiers include non-preferred generic drugs, preferred brand-name drugs, non-preferred brand name drugs and unique or exceptionally high-cost drugs. Each higher tier usually has a higher copayment.
Prescription Drug Plan: Why Formularies Are Important
When you’re deciding on a Medicare prescription drug plan, paying attention to formularies is vitally important for two reasons. First, each plan creates its own formulary structure, decides which drugs it will cover and determines which tier a drug is on. One plan you’re considering may cover a drug you need while another one may not. Or the drug may be on tier 3 on one plan’s formulary and on tier 4 on a different plan’s formulary. Secondly, the formularies can have different pricing on different plans. You may find that two different plans offer a medication you need on the same tier but the copayments aren’t the same. Comparison shopping for a drug plan may seem labor-intensive, but your hard work will pay off when you find the plan that offers the medication you need at a price you can afford.
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