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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. It’s important to know that no Part D plan covers all drugs and that the Centers for Medicare & Medicaid Services (CMS) doesn’t have a national Medicare formulary.

Each Part D plan creates its own formulary, so two separate plans from the same private insurer may have different lists of covered drugs. The varying formularies may be part of the reason that two plans from the same company have different premiums.

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Medicare sets rules for all Part D plan formularies, and federal law requires that all Medicare Part D plans include at least two drugs in each class of medications. This means it 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

What drugs doesn’t Medicare Part D cover?

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

  • Anorexia, weight loss or weight gain
  • 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 for 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?

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

In addition to noting every drug your plan covers, the list will identify 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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Finding out whether your drugs are on the plan’s formulary is the first step. It’s also important 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. As an example, a plan may charge:

Tier 1. The lowest copayment for preferred generic drugs

Tier 2. Slightly more for nonpreferred generic drugs

Tier 3. More for preferred brand-name drugs

Tier 4. The highest copayment for brand-name drugs or specialty medications not on its preferred list

The 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 and how much they charge in coinsurance or copayments when comparing Part D plans in Medicare’s Plan Finder.

Type in your zip code and select Part D plans, then add your drugs and preferred pharmacies. Your drugs and pharmacies may appear when you log in to your online Medicare account before accessing the Plan Finder.

In the Plan Finder, you’ll see a list of plans available in your area and an estimate of your medications’ yearly drug and premium costs. In each plan, under the Drug coverage heading, you can click on View drugs & their costs | Estimated total monthly drug cost | + View more drug coverage.

If you scroll down to Other drug information, you’ll see a checklist for your drugs with sections for prior authorization, quantity limits or step therapy. A Yes will be noted in the boxes that have restrictions for your drugs.

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 changes taking effect Jan. 1, your plan must notify you in September. That includes changes to its formulary, premiums, deductibles and copayments.

Each September you’ll receive an Annual Notice of Change, which provides details of the changes the plan will make for the following year and a copy of the new formulary. This gives you an opportunity to review your current coverage and other options during the annual open enrollment period (Oct. 15 to Dec. 7) and to switch to a different Part D plan if you choose. If that’s the case, your new coverage begins Jan. 1.

If your plan removes a drug you take from its formulary in the middle of the year, it must notify you and allow you to refill the prescription for at least 60 days. Sometimes Part D plans need government approval to make changes during the year.

A Part D plan cannot remove a covered drug from its formulary within the first 60 days unless the Food and Drug Administration (FDA) determines it’s not safe or the manufacturer removes the drug from the market. After 60 days, plans can remove drugs from their formulary, move them to a different pricing tier, or add restrictions, such as prior authorization and step therapy.

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 60 days before the change takes effect, or it must send written notice at the time you request a refill and provide a 60-day supply of the drug under the same terms.

The notice must also list alternative drugs in the same therapeutic category or class — that is, other medications you may be able to take for your condition — and 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.

What if my drug isn’t on my plan’s formulary?

If a drug you take isn’t on your plan’s formulary, you’ll probably have to pay full price. But first consider:

  • Asking your doctor if another drug that your plan covers will work just as well.
  • Requesting a formulary exception. If your doctor believes that a drug not on the plan’s formulary is medically necessary for you, you or your physician can request an exception from the plan. You’ll need to fill out paperwork and provide supporting information from your doctor.

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.

If the appeal decision is not in your favor, an independent organization that works for Medicare, not the plan, reviews the appeal. In all, Medicare has five levels in its appeals process, which can culminate in a federal district court review.

  • Seeing if you can switch Part D plans outside of open enrollment. If you receive financial assistance from the Extra Help program, you can switch Part D plans once every quarter. If a Part D plan with a five-star quality rating is available in your area, you can switch to that plan at any time.
  • Changing to a Part D plan that better suits your needs during open enrollment.

Keep in mind

Since Part D plans can change their formularies, premiums and pricing tiers each year — and new plans emerge or existing plans go out of business — it’s a good idea to compare all Part D options each year during open enrollment.

The Medicare Plan Finder is a great resource for finding a Part D plan that works for you. You’ll find whether all your prescriptions are covered in the plan’s formularies; how much you’ll pay in yearly total costs, including premiums and copayments for your specific drugs; if your pharmacy is on a plan’s preferred list; and whether the plan imposes any restrictions on the drugs.

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