The Medicare drug list, also called a formulary, lists the prescription drugs and vaccines that Medicare covers.
Medicare provides this coverage through Medicare Part D or Medicare Advantage (also called Part C) plans.
In this article, we explain how the Medicare drug list works and discuss Medicare-approved drugs. Then, we explain Medicare drug plans, eligibility, and costs.
We may use a few terms in this piece that can be helpful to understand when selecting the best insurance plan:
- Deductible: This is an annual amount that a person must spend out of pocket within a certain time period before an insurer starts to fund their treatments.
- Coinsurance: This is a percentage of a treatment cost that a person will need to self-fund. For Medicare Part B, this comes to 20%.
- Copayment: This is a fixed dollar amount that an insured person pays when receiving certain treatments. For Medicare, this usually applies to prescription drugs.
Medicare includes some medications in all Part D plans and Advantage plan formularies.
Each of the Part D plans has a variable list of covered prescription drugs.
Typically, Medicare Advantage plans include prescription drug coverage.
The drug list can differ among plans.
Medicare can change the drug list at any time by adding specific drugs to the list or removing them. Plan providers should let people with prescription drug coverage know about these changes.
Medicare Part D and Medicare Advantage plans cover certain medications. An individual should review their plan coverage to make sure that their prescription drugs appear on the list of medications.
Medicare sets a standard for all Part D plans to make sure that they cover these classes of medications:
- anticonvulsants to treat or prevent seizures
- antidepressants to treat depression
- antineoplastics to limit tumor growth
- antipsychotics to treat mental health conditions
- antiretrovirals for HIV treatment
- immunosuppressants to prevent organ transplant rejection
Medicare Part D does not cover over-the-counter (OTC) medications or prescription vitamins and minerals. However, Medicare does cover prenatal vitamins and fluoride.
Medicare excludes some medications, including those for:
- coughs and colds
- cosmetic purposes
- hair loss or growth
- weight loss or weight gain
Medicare Advantage plans include:
- Health Maintenance Organization (HMO) plans
- Preferred Provider Organization (PPO) plans
- Private Fee-for-Service (PFFS) plans
- Special Needs Plans (SNPs)
Prescription drug coverage varies among plans. For example:
- HMO plans and PPO plans: In most cases, these cover prescription drugs.
- PFFS plans: These plans may cover prescription drugs. If not, a person can enroll in a Medicare prescription drug plan to get coverage.
- SNPs: These plans must cover prescription drugs.
People who get healthcare coverage through Medicare Part A and Part B must also have Medicare Part D if they need prescription drug coverage.
Medicare Part A and Part B
These cover some prescription drugs during hospital stays. However, if someone needs to take medication from a pharmacy to take at home, Medicare Part A and Part B do not cover this cost.
Medicare Part D
Medicare Part D provides coverage for prescription drugs. Only people already enrolled in Medicare Part A or Part B can join a Part D plan.
Medicare offers various Part D plans with different levels of coverage. The plan’s total cost depends on the medications someone takes, where they live, and their income.
Medicare Part D plans typically have a coverage gap. This affects how much someone has to pay for their medication each year because there is a temporary limit on the amount that the plan will cover for medications.
Not everyone with coverage enters the coverage gap. In 2021, this gap begins after someone has spent $4,130 on their covered medication.
While someone is in the gap, they must pay 25% of the medication cost until their out-of-pocket expenses reach $6,550.
Private insurance companies provide Medicare Part D to people who already get one or both parts of original Medicare Part A and Part B.
A person can choose a stand-alone Medicare Part D prescription drug plan or get coverage as part of their Medicare Advantage plan.
A person should check their plan for drug coverage. Medicare Medical Savings Account plans cannot offer drug coverage, and some PFFS plans may choose not to offer drug coverage.
Medicare provides Part D plans for people who meet certain criteria, including those who:
- are aged 65 or older
- have a qualifying disability and have received Social Security Disability Insurance (SSDI) for more than 24 months
- have end stage renal disease (ESRD)
- have received a diagnosis of amyotrophic lateral sclerosis (ALS)
People can join or change a Part D plan during the Medicare Open Enrollment Period from October 15 through December 7.
There is a second enrollment period from January 1 through March 31, when people can change Medicare Advantage plans, which include Part D coverage.
A person may also change from an Advantage plan to original Medicare during this second enrollment period.
People should consider a Part D plan even if they do not take prescription drugs because if they delay enrollment, they may incur a premium penalty.
The cost of Medicare Part D depends on the premium, deductibles, coinsurance, and copayments.
There is a Part D premium to pay, as well as the premium for Part A and Part B. People who receive Part D coverage for prescription drugs must pay a set amount each month as an insurance premium.
2020’s average monthly premium of $42.05 was reported by the KFF.
A person may also have to pay a deductible, copayment, and coinsurance.
Medicare Part D formulary tiers
Medicare uses a tier system to organize prescription medications by price. The amount that someone pays for medication depends on the tier.
Drugs in lower tiers usually cost less than those in higher tiers. Most plans have a four-, five-, or six-tier system:
- Tier 1: Unbranded drugs with the lowest cost.
- Tier 2: Other generic drugs, but with a higher cost than tier 1.
- Tier 3: Branded drugs of preferred brand.
- Tier 4: Nonpreferred drugs with a higher cost than tier 3.
- Tier 5: Specialty drugs with the highest cost.
- Tier 6: Select care drugs that may have a lower copayment than tier 1 drugs.
The various Part D plans may classify the same medication in different tiers. Copayments and coinsurance may vary based on the tier level.
The Medicare drug list is a specific list of prescription medicines that Medicare Part D and Medicare Advantage plans cover. People should check to see whether the plan includes their particular medication.
Medicare classifies drugs according to tiers. The lower tier medications cost less than the upper tier ones.
People pay a premium for prescription drug coverage. They also have to meet a deductible, then pay copayments or coinsurance for their medication.
People should consult the Medicare website to find up-to-date information about Medicare prescription drug coverage.