Medicare Part D is the prescription drug coverage for Medicare recipients. Part D plans are designed to defray the cost of your medications, but they do not kick in automatically when you enroll in Medicare Parts A and B. Once eligible, you would apply for the coverage through a private insurance company. Though all Part D plans are required to comply with the same standard federal government guidelines, there are differences in cost and coverage. Therefore, it is best to do some comparison shopping before making a decision. The first step is to look at each plan’s formulary.
Defining a Formulary
The Medicare & You handbook defines a formulary as “a list of prescription drugs covered by a prescription drug plan or another insurance plan offering prescription drug benefits.” Most people simply refer to it as a drug list. When conducting a side-by-side comparison of drug plans, have on-hand the name, dosage and frequency of each one of your current medications. Since the list of covered drugs can vary from one plan to the next, peruse each plan’s formulary to ensure your medication is included at a price you can afford. Many drug lists are organized into tiers with the lower tier comprised of the drugs requiring the lowest copayment.
Formularies include both generic and brand-name drugs. To support people with multiple health conditions, the list is constructed to include at least two drugs in each category and class that is typically prescribed. However, plans have the leeway to determine which of the drugs covered by Part D they will offer. If the list of covered drugs does not include your specific drug, it will usually include one that is comparable. Consult with your physician in this case. If necessary, submit an exception request to your plan administrator.
Changes to the Formulary
Even if the prescription drug coverage includes your medication, continue to check the list periodically because the plan is permitted to modify the formulary throughout the year as long as it adheres to federal guidelines. Coverage rules and costs can change. Brand name drugs can be replaced by generic drugs. In these cases, the plan should give you at least 30 days of notice in writing before the effective date.
Sometimes, the Food and Drug Administration (FDA) decides certain drugs are unsafe. Additionally, drug manufacturers may act on their own findings and pull products from the market.
Saving Money With a Part D Plan
Cost savings is the reason a formulary inclusive of your medications is important. The drugs on these lists reflect those for which plans negotiate for the best price. The consequence of non-compliance with the list of covered drugs may result in your responsibility for full price versus a copayment or coinsurance. Of course, using generic rather than brand-name drugs is another cost-saving strategy.