What is a Medicare Part D Formulary, and what does it mean to you? It all has to do with your prescriptions. And when it comes to the prescription drugs covered by your health insurance plan, the more you know, the better.
How the Medicare Part D Formulary Impacts Your Plan and Coverage
A formulary is a list of drugs covered by your Medicare Part D plan benefits. These lists may differ among Medicare prescription medicine plans. Medicare requires these formularies to include a range of commonly prescribed drugs to give people using the Medicare Part D formulary plenty of choices. You get coverage benefits by filling your prescriptions at a pharmacy in your plan network.
Many formularies use tiers to divide the medicines they cover into different cost categories. Not all Medicare Part D plans will include the same exact tiers. In general, drugs on the lowest tier will have the lowest copays—for example, $5. Drugs in a middle tier might have a $30 copay, while drugs in the specialty tier may cost 25%-33% of the total cost.
Certain medications on your Medicare Part D formulary require prior authorization from your insurance company. This requirement exists to make sure certain prescriptions are only used as intended and when medically necessary. Your healthcare professional handles contacting the insurance company to request authorization.
Your insurance company may ask you to use step therapy, which means trying medications on the lower tiers of the formulary first. Then, if those less expensive medications aren’t working, your doctor can ask the plan to cover a more expensive drug on a higher tier.
The Part D Formulary and What You’ll Pay
The specifics of your out-of-pocket expenses on Medicare Part D will depend on a range of factors. These include the plan you choose, your prescriptions, and the pharmacy you use. Some people qualify for Extra Help with their Medicare Part D premium.
Your Part D expenses may include:
- A monthly premium
- A yearly deductible
- Applicable copayments or coinsurance
- Costs that fall into the coverage gap, also known as the Medicare Part D Donut Hole (This coverage gap will be eliminated in 2019.)
- A late enrollment penalty if you go without qualifying drug coverage for 63 or more days after your initial enrollment period
What If the Formulary Changes?
If your insurance company changes your formulary, it will generally have to give you a 60-day notice. That way, you have the time to consult your physician about whether you want to continue your treatment on that medication. If your plan doesn’t tell you in advance, you’ll find out when you request a refill. You’ll receive a 60-day supply under your existing coverage and a written notice of the change. However, if the Food and Drug Administration recalls a drug for safety reasons, the plan can let you know after changing the formulary.
When they provide that information to you, they’ll include:
- The name of the medication
- Whether the medication is no longer covered or its coverage tier is changing
- The reason the medication is no longer covered or changing coverage
- Medication alternatives
- How you may obtain a coverage determination or exception
Whether you’re trying to choose a Medicare Part D plan or navigating a change in your Medicare Part D formulary, don’t panic. HealthMarkets can help. Since 2010, HealthMarkets has helped Americans enroll in more than 4 million insurance policies. Call us today at (800) 488-7621, or find a licensed insurance agent to help get answers to your questions.