One of the most expensive parts of routine healthcare is paying for prescription medications. Medicare Part D is one of the options Medicare offers to help you pay for prescription drugs. However, prescription medications cost a different amount depending on the plan and your area. You can find out which drugs are covered by your plan by looking at their formulary. Read on to learn more about formularies.
How Part D Works
Original Medicare does not automatically cover prescription drugs. In order to get prescription drug coverage, you have multiple options. You can enroll in a Medicare Advantage Plan that has prescription drug coverage, keep prior coverage like TriCare that has prescription drug coverage, or enroll in Medicare Part D. Choosing an option depends on your priorities and the cost of each plan.
Medicare Part D are plans offered by private insurance companies that cover prescription drugs. You choose a plan and company depending on the cost of the plan and what drugs it covers. You can compare Part D options using the Medicare comparison tool on Medicare’s official website (Medicare.gov). This comparison tool can even help you compare drug prices based on each plan’s formulary.
What a Formulary Is
A drug formulary is a list that tells you the generic and name-brand medications an insurance plan covers. A formulary helps insurance companies offer a variety of medication coverage while keeping their costs down. They form agreements with different pharmacies and health systems to cover certain medications. They decide on which medications to cover based on multiple factors, like the therapeutic class and the tier.
A formulary has different therapeutic classes, defined by the type of medication they are and what they are designed to treat. Some formularies will only cover certain drugs in each class. For example, some formularies will include Lisinopril, a special type of ACE Inhibitor that treats high blood pressure, but they will not cover Captopril, another ACE Inhibitor that also treats high blood pressure. By covering at least one but not all of the medications in each class, insurance companies save money and are supposed to pass that savings on to the consumer.
Formularies also have 5 tiers. These tiers designate how expensive the drugs are for patients. Tier 1 covers generic drugs and is the cheapest. Tier 5 covers specialty drugs, like HIV medication, and is the most expensive.
Why the Part D Formulary Matters
Each plan has a different formulary. You may already be on medications. Before you choose a Part D plan, you want to make sure that that formulary covers the medications you are already taking. Additionally, you can estimate your cost for that medication based on each plan’s formulary using the comparison tool above.