Medicare Part D Formularies – Why It Pays To Shop Around

Medicare Prescription Drug PlansIf you have a Medicare Prescription Drug Plan, did you examine the formularies of several plans before you enrolled?

If you are turning 65 soon, and are about to enroll in a plan, did you check the formularies of at least three plans?

If you are like most of our clients before they met with us, the answer is most likely no!

Below, we will show you why you need to shop around, and the best way to do it.

Medicare Prescription Drug Plans have their own list of covered prescriptions called a formulary.

Plans cover both generic and brand‑name prescription drugs.  Medicare drug plans aren’t required to cover certain drugs, such as benzodiazepines, barbiturates, drugs for weight loss or gain, and drugs for erectile dysfunction. Some plans may cover these drugs as an added benefit.  Also, drug plans don’t generally cover over-the-counterdrugs.

Although, Some states may cover these drugs if you have Medicaid.

To make sure people with different medical conditions can get the prescriptions they need, drug lists for each plan must include a range of drugs in each prescribed category.

All Medicare Prescription Drug Plans generally must cover at least two drugs per drug category,

but the plans can choose which specific drugs they cover.

Plans are required to cover almost all drugs within these protected classes:

  • anti‑psychotics
  • anti‑depressants
  • anti‑convulsants
  • immune suppressants,
  • cancer
  • HIV/AIDS drugs.

If you use a drug not on your plan’s drug list, you’ll have to pay full price instead of a copayment or coinsurance.  All Medicare drug plans have negotiated to get lower pricesfor the drugs on their drug lists,so, using drugs listed on the formulary will generally save you money.

Also, using generics instead of brand‑name drugs may save you money.


To lower costs, many plans place drugs into different “tiers”on their drug lists.

However, not all plan formularies place the same drugs in the same tiers.

Each tier costs a different amount. A drug in a lower tier will cost you less than a drug in a higher tier. Each plan can divide its tiers in different ways, but most plans use a tier structure similar to the one below:

  • Tier 1–Preferred Generic Drugs. Tier 1 drugs cost the least.
  • Tier 2–Non-Preferred Generic Drugs. Tier 2 drugs cost more than Tier 1 drugs.
  • Tier 3–Preferred brand‑name drugs. Tier 3 drugs cost more than Tier 2 drugs
  • Tier 4-Non-Preferred Brand-Name Drugs. Tier 4 drugs cost more than Tier 3 drugs

So, the bottom line here is that shopping around and checking several plans’ formularies and tiers can save you a significant amount of money yearly.

Besides the tiers,  there are other policies and rules that differ from plan to plan:

Prior Authorization

Some plans require prior authorization for certain drugs. This means before the plan will cover a particular drug, your doctor or other prescriber, you must first show the plan you have a medically‑necessary need for that particular drug. Plans also do this to be sure these drugs are used correctly.

Step Therapy

Step therapy requires you use one or more similar, lower cost drugs that have been proven effective for most people with your condition before you can use a more expensive drug.  For instance, some plans may require you first to try a generic drug or drugs (if available), on their drug list before you can get a name-brand drug covered.

Note: If you have already tried the similar, less‑expensive drug and it didn’t work, or if your doctor believes that because of your medical condition it’s medically necessary for you to be on a more expensive step‑therapy drug, he or she can contact the plan to request an exception. If your prescriber’s request is approved, the plan will cover the more expensive drug.

Some plans will require step therapy for certain drugs, and some may not. Checking each plan’s step therapy policy can ultimately save you time and money.

Quantity Limits

For safety and cost reasons, Medicare Prescription Drug Plans may limit the amount of drugs they cover over a certain period of time.

For example, most people prescribed heartburn medication take 1 tablet per day for 4 weeks.  Therefore, a plan may cover only an initial 30‑day supply of heartburn medication. Should you need more tablets, you may need your doctor’s help in providing information for a refill. If your doctor believes that, because of your medical condition, a quantity limit isn’t medically appropriate, you or your doctor can contact the plan to ask for an exception. If the plan approves your request, the quantity limit won’t apply to your drug.

In conclusion,

Shopping around and checking several plans, especially the formulary, can save you from a lot of guesswork and frustration, and, of course, save you money.


Call us at 415-999-5071 or email us to get a clear and simple process to compare plans and formularies.

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