How Does it Work?

Each Medicare Part D plan uses a list of approved drugs to decide what’s covered and what isn’t. This list is called a drug formulary. The formulary may differ from plan to plan. Many plans arrange their list of covered drugs in different levels, called “tiers”. Generally, drugs in a lower tier will cost less than drugs in a higher tier. Here is one example of a typical Medicare drug plan’s tier system (but remember, your plan may be different):

Level or Tier 1: Preferred, low-cost generic drugs
Level or Tier 2: Nonpreferred and low-cost generic drugs
Level or Tier 3: Preferred brand-name and some higher-cost generic drugs
Level or Tier 4: Nonpreferred brand-name drugs and some nonpreferred, highest-cost generic drugs
Level or Tier 5: Highest-cost drugs including most specialty medications

What drugs are not covered by Part D?

Some medications may not be covered by your Medicare Part D plan. This could depend on your plan’s formulary, which may limit coverage of some drugs based on medical necessity, cost or safety.

Medicare Part D restrictions and limitations:

Some prescription drug plans may have restrictions on certain medications. These can include:

Prior authorization: Your doctor may need approval from your plan before prescribing some medications. This may be because a drug is only approved for certain conditions, or to ensure that the drug is medically necessary.
Step therapy: For some conditions, your plan may require you to try a cheaper drug on your formulary first. If the cheaper medication doesn’t work for your condition or produces bad side effects, you may be able to move up a “step” to a more expensive drug.
Quantity limits: Sometimes, plans may limit the amount of medication prescribed over a period of time. This is done for safety reasons, or to cut down on costs.

What to do if your drug isn’t covered:

If you have trouble getting the medication that you want covered, you may be able to appeal. You and your doctor can submit a formal request for an exception to a drug coverage rule. For example, you could send a request to get coverage for a drug that’s not in your formulary. You could also send a request to waive a step therapy requirement to use a lower-tier drug.