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Medicare Part D: Understanding Formularies

Written by Jason Patterson

Medicare is a great program that has helped millions of people across the United States get the health care and medical attention that they deserve. The program is a great tool for senior citizens, but one of the biggest expenses that it doesn’t cover is a prescription drug. These medications are one of the biggest portions of Medicare enrollee’s budgets. There is no way for you to lower the costs of those pills, but there is a way that you can ensure that you aren’t left with a drained bank account because of medication.

Medicare Part D is the part of Medicare that covers prescription medications. Part D is available to everyone with Medicare. If a Medicare enrollee opts not to enroll in Medicare Part D coverage when he or she is initially eligible to do so, and they do not have any other type of creditable prescription drug coverage, or they do not receive Extra Help, then it is likely that they will be required to pay a late enrollment penalty when they do end up enrolling in Medicare Part D coverage.Medicare Part D Formularies

These prescription drug plans are not sold by the government, but rather by individual insurance companies. Each of these prescription drug plans has its own list of covered drugs, referred to as a “formulary.”

Formulary is a term that will become more familiar to you once you have been enrolled in Medicare Part D for a longer period of time. This is because it will have a direct effect on the amount that you pay for your prescription medications.

A formulary is the list of drugs that each of the Part D plans decides to cover. It is important to understand that there is not a one-size-fits all National formulary that is put out by Medicare. Rather, each of the Medicare Part D prescription drug plans will put out its own. So, the formulary in one plan may differ significantly from that of another plan.

There are several reasons why it is important that your medications are included in your particular Medicare Part D plan’s formulary:

  • Enrollees are required to pay 100% for drugs that are not covered. First, you are typically required to pay the entire amount for medications that are not covered under the Part D plan that you are enrolled in. Your plan will pay its share of the cost during the initial and the catastrophic phases (i.e., Phase 1 and Phase 4). However, for any medication that the plan does not cover, you will have to pay full price in all phases of coverage, unless you are able to obtain an exception from the plan. The difference in your out-of-pocket expenses between a covered and a non-covered medication could be a great deal each and every month.
  • You are not eligible for donut hole credit on drugs that aren’t covered. If you end up falling into the Medicare Part D donut hole, the cost of any medications that are not covered by your plan will not be counted towards the out-of-pocket limit that helps to get you out of that gap and in turn triggers the low-cost catastrophic coverage.
  • You are more likely to both fill and take your medications properly. One of the biggest reasons that it is important that your medications are included in your Medicare Part D plan’s formulary is that you will be much more likely to receive and take the proper type and amount of medication that you need for any type of health condition (or conditions) that you have. In other words, you are much less likely in this instance to skip doses, or worse yet, avoid getting them filled altogether.

When it comes to formularies, many Medicare prescription drug plans will place medications into different “tiers.” Medications that are in each of these tiers will typically have a different cost.

For example, drugs that are placed in lower tiers will typically cost less than those that are in higher tiers. In some instances, however, if a medication is in a higher tier and an enrollee’s doctor feels that he or she needs that particular drug instead of a similar drug that is on a lower tier, then the enrollee or the doctor may ask the Medicare Part D plan for an exception. If the exception is granted, the plan enrollee can usually get a lower copayment.

Typically, Medicare Part D plans can make changes to its formulary throughout a given year – provided that those changes fall within guidelines that have been set by Medicare. If a change involves a drug that an enrollee is currently taking, there are certain things that must be done by the plan. These include at least one of the following:

  • Providing written notice to the plan enrollee at least 60 days prior to the date in which this change becomes effective;

At the time that the enrollee requests a refill of the prescription medication, the plan must provide written notice of the change, as well as a 60-day supply of the medication under the same plan rules as before the change.

One of the most common reasons that senior citizens don’t fill their prescriptions is because of how expensive they are. This is one of the worst mistakes that you can make. You should never have to sacrifice your health because of money. There is nothing at you can do about expensive prescriptions costs, but these Part D plans are a great way to protect yourself.

Sure, you could find yourself paying for costly drugs when you fall into the donut hole, but there is going to be a significant change to the donut hole in 2017 that could save you hundreds or even thousands of dollars. In 2017, Medicare Part D participants are going to get a 60% discount on brand-name drugs while you’re in the infamous donut hole. For anyone that has purchased brand-name prescriptions, they know that getting 60% could mean hundreds of extra dollars in your pocket.

If you have any questions about Medicare, Supplemental Plans, your out-of-pocket expenses, or Part D drug plans, don’t hesitate to contact us today. Our agents would be happy to answer any of those questions, run quotes and ensure that you’re getting the coverage that you deserve. Don’t let money keep you from living the long, happy, and healthy life that you want and deserve.

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About us

Jason Patterson has been in the insurance industry for over fifteen years. Starting in 2005, he became one of the first agents to sell medicare supplements online. From that small start, he grew an agency that helped thousands of people with their insurance needs in all fifty states.

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