Do you know what to look for in a Medicare prescription drug plan? What are the types of plans you can get and how are they different? How do you find the plan that’s right for you? Here are three things to look for to help you get the prescription drug coverage you need.
1. Evaluate your Medicare drug plan options
There are two ways people with Medicare can get prescription drug coverage. The first is a stand-alone Medicare Part D prescription drug plan. Part D plans only cover prescription drugs.
The second way to get Medicare prescription drug coverage is to choose a Medicare Advantage plan (Part C) that includes prescription drug benefits. Medicare Advantage provides the same coverage as Original Medicare Parts A and B, Part D drug coverage, and often includes extras like dental and vision.
Both Part D and Medicare Advantage plans will vary in what drugs are covered and how much they cost based on the plan insurance provider and your location.
2. Check your covered drugs list
One important part of choosing Medicare prescription drug coverage is making sure your drugs will be covered. You can find this out by looking at the formulary, which is the list of drugs a plan will cover. Match up your list of prescription drugs with a plan’s formulary to make sure the plan will cover your medicines.
Another thing to do when looking at a plan’s formulary is to look at whether the drugs are organized into tiers. A tier is a group of drugs, but Medicare plans use tiers to organize drugs for determining costs. Here is a brief description of the drug tiers your plan might use:
- Tier 1 – lowest copay: This tier includes lower-cost, commonly-used generic drugs.
- Tier 2 – low copay: This tier includes most generic drugs.
- Tier 3 – medium copay: This tier includes many common brand name drugs (preferred brands) and some higher-cost generic drugs.
- Tier 4 – highest copay: This tier includes non-preferred generic and non-preferred brand drugs.
- Tier 5 (Specialty Tier) – coinsurance: This tier includes unique and/or very high-cost drugs. You pay a percentage of the total drug cost (coinsurance).
As you can see, the lower the tier, the lower your copay will generally be. Many higher-tier drugs also have lower-cost options in lower tiers. You can always ask your doctor if you can switch to one of these drugs to help reduce your out-of-pocket costs.
The important thing to note here is that if a plan uses a tiered formulary; make sure you note where your drugs are listed when estimating total expenditure for the year. The more high-tier drugs you have, the more out-of-pocket expenses you could end up with.
A note about special requirements: Some plans with tiered formularies may also have special requirements for certain drugs. One of these requirements is called “step therapy.” With step therapy, you must first try a less-expensive drug to see if it works for you. You can only “step up” to a more expensive drug if you and your doctor can show the less expensive drug didn’t work for you. Your plan’s formulary will tell you which drugs have special requirements, like step therapy.
3. Estimate your drug costs
Whether you choose a stand-alone Part D prescription drug plan or a Medicare Advantage plan, you will have to pay some of the costs for your prescriptions. This is called cost-sharing and your costs may include premiums, copays, coinsurance and deductibles.
You can learn more about your potential costs and how cost-sharing works for Medicare prescription drug coverage here.
Next step: Compare Medicare drug plans
Now that you know what to look for, how do you find a plan that meets your needs? Well, you can start here with a simple ZIP code search and find available Part D and Medicare Advantage plans, and even save your favorites to compare later.