Making the most of your medications budget

Refilling a prescription often feels like a guessing game. Sometimes the medication costs twice what you expect, other times it’s next to nothing.

Many people worry about the price of medications even when using Medicare’s pharmacy benefits. It is estimated that millions of Medicare beneficiaries over the age of 65 have struggled with affording prescriptions. What’s more, if you’re a woman, have chronic conditions or are considered lower income, you are also more likely to struggle with the cost of prescription drugs. Black and Latino older adults also typically have difficulty affording prescriptions at about 1.5 to 2 times the rate of white older adults.

Understanding prescription drug lists

Medicare beneficiaries, no matter which plan they have or their situation, may find it helpful to better understand how covered prescription drugs are priced.

Here’s what you need to know to help better understand your medication costs – and possibly find savings opportunities along the way through your plan coverage.

What is a prescription drug list?

A drug list is a catalog of the medications your health plan covers and how you share in the cost. Some plans call it a drug formulary. Covered medications usually cost less than ones that aren’t covered.

Health plans typically revise this list twice a year, although changes that benefit consumers (such as new medications or price cuts) may occur at any time.

Medication lists break drugs into groups called tiers, and each tier has a certain payment level. You may have a set copay or coinsurance for each level. For some plans, tier pricing might not apply until you hit your deductible. Tiers vary by health plan, but generally look something like this:

  • Tier 1: Mainly generics and some brand names; lowest cost
  • Tier 2: A mix of generic and brand-name medications that provide good overall value; mid-range cost
  • Tier 3: Mostly brand-name drugs; highest cost

What should I ask?

As with all aspects of your health care, you have a say in decisions about medications and their cost. Consider asking your doctor, pharmacist or health plan the following questions:

  • What drug are you prescribing for me?
  • How long will I need to take it?
  • Is this medication generic or brand name? Does my health plan cover it?
  • Does my plan require prior authorization (pre-approval) or step therapy (trying lower-cost medications first to see if they work)?
  • What tier is this medication in on my plan’s drug list, and what will it cost me?
  •  Is there a lower-tier option that would work for me?
  • What are its benefits and side effects?

Where can I learn more?

Your insurer’s website will include its drug list, and each plan has its own formulary. If your health plan offers an app, you may be able to manage medications on the go and use drug-pricing tools from that platform. There’s no need for sticker shock if you do your homework.

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