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What is a Medicare formulary?


A Medicare formulary is a list of brand-name and generic drugs covered by a Medicare Part D prescription plan. No Part D plan covers all drugs, nor does the Centers for Medicare & Medicaid Services (CMS) have its own national Medicare formulary.

Each Part D plan creates its own formulary, so two separate plans from the same private insurer may cover different drugs. This could explain why two plans from the same company have different premiums.

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Medicare sets rules for all Part D plan formularies. Federal law requires that all Medicare Part D plans include at least two drugs in each class of medications, meaning a plan must cover two similar drugs treating the same medical condition.

All Part D plan formularies also must contain virtually all drugs in the following six categories:

  • Anticancer drugs, except when covered through Part B
  • Anticonvulsive treatments for seizure disorders
  • Antidepressants
  • Antipsychotic medications
  • Antiretrovirals for HIV/AIDS
  • Immunosuppressant drugs for transplants

Under a 2023 law, Part D plans can’t charge more than $35 for a 30-day supply of covered insulin; however, the Part D plan may not cover all types of insulin.

What drugs doesn’t Medicare Part D cover?

By law, certain drugs are excluded from Medicare Part D coverage. These include drugs to treat:

  • Cold or cough symptoms
  • Erectile dysfunction
  • Infertility

Prescriptions for cosmetic purposes, such as promoting eyelash or hair growth, reducing fine lines and wrinkles, and lightening dark spots and scars, also won’t be part of any formulary.

If drugs used for the above conditions are prescribed to treat other illnesses, Medicare does allow exceptions. Medicare Part D also won’t cover over-the-counter drugs or prescription vitamins, but it will cover fluoride and prenatal vitamin prescriptions. (A small number of women who qualify for Medicare because of disabilities are of childbearing age.)

In addition, Part D covers drugs used to treat physical wasting from AIDS, cancer or other diseases, as well as drugs used to treat skin disorders like acne, psoriasis, rosacea or vitiligo.

How can I find drugs covered in a Part D plan’s formulary?

Most plans list formularies on their websites under plan documents. You also can request a plan’s formulary.

In addition to noting every drug your plan covers, you can see if the plan has any drug restrictions, such as prior authorization or step therapy requirements. In that case, you may need special permission before your plan will cover the drug or dosage prescribed, even though it’s on the plan’s formulary.

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You’ll want to find out how much the plan charges in copayments, which is a fixed dollar amount you pay for each prescription, or coinsurance, the percentage of your medication’s total cost that you pay.

Most Part D plans have four or five pricing tiers, each with different levels of copayments or coinsurance. Higher tiers generally come with larger out-of-pocket costs.

Tier 1: Preferred generic drugs

Tier 2: Nonpreferred generic drugs

Tier 3: Preferred brand-name drugs

Tier 4: Nonpreferred brand-name drugs

Tier 5: Specialty drugs

The specific drugs in each tier can vary from plan to plan, even if all the plans cover the drug in their formularies. You can see which Part D plans in your area cover your drugs, what coverage restrictions they have and how much they charge in coinsurance or copayments by comparing Part D plans in Medicare’s Plan Finder.

When can my Part D plan change its formulary?

The most common time for a Part D plan to change its formulary is at the beginning of the calendar year. But the plans are allowed to make changes more often.

For any changes taking effect Jan. 1, including formulary, premiums, deductibles and copayments, your plan must notify you the prior September.

That’s when you’ll receive an Annual Notice of Change with any adjustment planned for the following year and the new formulary. You can make changes to your coverage and review other options during the annual open enrollment period (Oct. 15 to Dec. 7). If you switch to a different Part D plan, your new coverage will begin Jan. 1. If you’re eligible for the Extra Help program, which helps people with low incomes pay Part D expenses, you can switch Part D plans as often as once every quarter.

Your plan must inform you of any formulary changes involving a drug you’re now taking. It must either send written notice of the change at least 30 days before the change takes effect, or send written notice at the time you request a refill and provide a 30-day supply of the drug under the same terms.

This notice will list alternative drugs in the same therapeutic category or class of your current medications, as well as explain the steps needed to ask for an exception to the new policy. In some cases, the plan must allow you to continue to take your present drug for the rest of the year, if medically necessary, regardless of the formulary change.

If your drug is removed from the market because the FDA has deemed it unsafe, your plan must notify you as soon as possible. Work with your doctor to determine an alternative medication that fits with your plan.

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Keep in mind

If your doctor prescribes a drug that isn’t on your plan’s formulary, you may have to pay the full price. But first consider asking your doctor if another drug that your plan covers will work just as well.

You can request a formulary exception if your doctor believes that a drug not on the plan’s formulary is medically necessary for you.

The plan must decide within 72 hours of receiving the doctor’s request or within 24 hours if the doctor considers your case urgent. If your plan doesn’t grant the exception, it must tell you in writing how to file an appeal.

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