Drug Formularies: What You Need to Know

What Is a Formulary?

A formulary is simply the list of medicines your plan covers. Each Part D or Medicare Advantage plan builds its own list, and groups drugs into "tiers" based on cost. Tiers range from 1 to 4, plus a Specialty Tier. Tier 1 typically costs the least, and Specialty Tier are often high-cost, unique medications.

• Generic drugs are usually the lowest, like Tier 1 or Tier 2, so they cost less.
• Brand-name and specialty drugs cost more and sit in higher tiers.

Why It Matters to You

• Your plan may only cover certain drugs in a category. If your doctor prescribes something similar that is not on the list, you could pay full price.
• Formularies can change every year. A drug covered last year may not be covered this year, or it may move to a higher tier.
• Some drugs need your doctor to get approval first before your plan will cover them. This is called "prior authorization."
• Part D and Medicare Advantage plans also have their own pharmacy networks. Filling a prescription at a pharmacy outside your plan's network can raise your cost, even for a drug on the formulary.

What You Can Do

• Check whether your current medicines are on a plan's formulary before you enroll. This is especially important when comparing Medicare Advantage plans with different drug coverage or standalone Part D plans during Annual Enrollment.
• If a drug is not covered, ask your doctor about a covered alternative.
• Review your formulary every year during annual enrollment. Plans and coverage can change.
• Check that your pharmacy is in your plan's Part D network to help keep your costs down.
• If you take a high-cost specialty medication, ask specifically how it's covered, including tier placement, coinsurance, and any special pharmacy or authorization requirements.