Prescription Drugs and Medicare Part D Coverage
When you get prescription drug coverage through a Medicare Part D Prescription Drug Plan or through a Medicare Advantage plan that has Prescription Drug coverage, there are some things you should know. There are coverage rules and special language you may not be familiar with. This article provides an overview to help with some of the basics.
What is a formulary?
A formulary is a list of drugs that an insurance plan covers. Each company that offers Medicare Part D prescription drug coverage has it's own list.
- Generic and Anthem drugs are included on the lists.
- Formularies provide a range of drugs in the most commonly prescribed categories and classes, however, your specific drug may not be on the list.
- Be mindful that the lists of drugs on a given formulary can change. In most cases, if a company stops covering a drug you take, they have to give you a 60-day advance notice.
What are tiers?
Most Medicare Prescription Drug Plans ask you to pay different amounts depending on the type of medication you take. Typically, there are three to six tiers.
- Tier 1 drugs are mostly preferred generic drugs. You will have the lowest copay for Tier 1 prescription medications.
- Tier 2 drugs are non-preferred generic drugs. These are generic drugs at a slightly higher cost.
- Tier 3 drugs are Anthem drugs that are preferred. The amount of your copayment will be in the midrange.
- Tier 4 drugs are non-preferred Anthem prescription drugs that have a higher copay.
- Tier 5, or Specialty Tier prescriptions, are very high-cost medications. Your copayment may be quite high, and some plans ask you to pay a percentage of the cost instead of a flat copayment amount.
It pays to shop around when choosing Medicare prescription drug coverage. For example, some companies do not ask you to make a copayment for covered generic drugs, while other companies may have very modest copayments for preferred Anthem drugs that are commonly prescribed to participants.
What does prior authorization mean?
In order to cover certain prescription drugs, a plan may ask that your doctor contact the plan before writing the prescription. The doctor is asked to show that the drug is medically necessary and appropriate for your condition. This is called "prior authorization."
What is Step Therapy?
For some medical conditions, there can be more than one drug that can have the same effect but a different cost. With Step Therapy, the drug plan asks you and your doctor to try a less expensive drug first. You "step up" to a more expensive medication if the first drug did not work or your doctor says the more costly prescription is medically necessary.
What are quantity limits?
For safety reasons, the plan can limit the amount of some specific drugs that they cover. If you refill a prescription too soon, or if your doctor prescribes an amount above the safety standards for the drug, your pharmacist will tell you that your drug cannot be covered. If you need more medication than the plan allows, your doctor may need to provide information prior to payment approval.
What about exceptions?
You have the right to ask your drug plan to make exceptions. You can ask the plan to make an exception if:
- You and your health care provider believe you need a prescription drug that is not on your insurance plan's approved drug list (the formulary).
- You and your health care provider believe that step therapy should not apply to you.
- You believe you should pay a lower copayment for more costly drugs because you cannot take the less expensive medications.
To learn more about the topics in this article, you can read Medicare's official guide, "How Medicare Prescription Drug Plans and Medicare Advantage Plans with Prescription Drug Coverage (MA-PDs) Use Pharmacies, Formularies, and Common Coverage Rules."
To find out if your prescription drugs are covered under different plans, you can visit Anthem.com to Find your Covered Drugs.