The Medicare Part D program helps people pay for their prescription drug costs. Prescription Drug Plans typically require most enrollees to pay a monthly premium and may include a yearly deductible. Many prescription drug plans also offer incentives, such as discounted pricing on 90- or 100-day supplies of medications for long-term conditions, like high blood pressure. Several factors determine how much a person will pay for their medications, including the cost of the plan they select, any deductibles, and their cost-sharing arrangements.
Plans must follow a standard benefit design, but can also offer enhanced benefits. Each plan has a drug list formulary that lists the medications it will cover. The drugs are classified into tiers based on price. More expensive drugs are typically placed in higher tiers, which means people pay a greater percentage of the medication’s cost. Plans may also use utilization management tools, such as prior authorization, quantity limits and step therapy, to help control drug costs.
In addition to determining which drugs are covered, the drug list can also help a person understand their prescription costs. The drug list provides information, such as the drug name, tier level and any requirements or limitations associated with the medication. It will also show if the drug is generic or brand-name. Generic drugs are similar to the original, brand-name medication and have been deemed as safe and effective by the FDA. Plans can make limited changes to their drug lists during the course of a year, but typically only add new drugs or move existing drugs to a different tier.
If a plan participant is prescribed a medication that is not listed on the formulary, they can ask their doctor to request an exception to use the medication. The plan will review the request and decide whether to approve it. If the drug is approved, the plan will notify the individual and their prescriber.
It is important to note that not all pharmacies are part of the Medicare network. Using an in-network pharmacy will help you save money on your prescription costs. A good way to find out if a pharmacy is in-network is to call the plan or visit their website. Most plans will have a list of preferred pharmacies where you can save even more on your drug costs.
The annual open enrollment period is October 15 through December 7. It’s a great time to consider switching plans. If you do, be sure to check your new plan’s drug list and look for any changes that may impact the cost of your prescriptions.
During the initial coverage phase, most beneficiaries will pay 100% of the drug’s cost until they meet the deductible. Once the deductible is met, beneficiaries will pay a coinsurance amount until reaching the annual out-of-pocket limit.