Medicare Prescription Drug Coverage: 5 Things That Can Change Each Year

If you take prescription medications regularly, do not assume that a Medicare drug plan that worked well this year will work exactly the same way next year.

Medicare Part D prescription drug plans and Medicare Advantage plans that include prescription drug coverage can change from one plan year to the next. Your plan’s covered drug list, pharmacy network, medication cost tier, coverage rules, premium, deductible and other out-of-pocket costs may be different for the coming year.

That is why it is important to review your prescription coverage during Medicare Annual Enrollment Period, which runs from October 15 through December 7. Reviewing your options before the new plan year begins can help you understand potential coverage and cost changes before you arrive at the pharmacy in January.

Here are five important areas to review.

1. Your Plan’s Formulary

A formulary is the list of prescription drugs covered by a Medicare drug plan. A plan can update its formulary for a new plan year, which can affect whether and how a medication is covered.

Your medication could remain covered, move to a different tier, require new coverage rules or in some cases no longer appear on the plan’s formulary. If a medication is not covered, you may have options such as asking your prescriber about an appropriate alternative or contacting the plan to learn about its exception process.

Note: Do not start, stop or change a medication based on plan coverage alone. Always discuss medication decisions with your physician or other qualified healthcare provider.

2. Medication Tiers and Out-of-Pocket Costs

Medicare drug plans organize covered medications into cost tiers. Lower tiers often include many preferred generic medications, while higher tiers may involve larger copayments or coinsurance.

Even when a medication remains on your plan’s formulary, your costs can change if the medication moves to a different tier. For example, a medication that was in a lower-cost tier this year may have a higher copayment or coinsurance amount next year.

When reviewing options, look beyond whether a drug is covered. Also review the estimated cost at your preferred pharmacy and the plan’s applicable deductible, copayment or coinsurance.

3. Coverage Rules and Utilization Requirements

A plan may apply coverage rules to certain medications. These rules can change from one plan year to the next and may affect how or when a prescription is covered.

Common requirements include:

• Prior Authorization: Your prescriber may need to provide information showing why the medication is medically necessary before the plan covers it.

• Step Therapy: The plan may require you to try certain lower-cost medications before it covers another medication.

• Quantity Limits: The plan may limit the amount of a medication it covers during a particular period.

If a medication has a new coverage rule, address it early. Your prescriber, pharmacist and plan can help clarify the process and available options.

4. Your Preferred Pharmacy and Pharmacy Network

Where you fill your prescriptions can affect what you pay. Medicare drug plans may have preferred pharmacies, standard in-network pharmacies, mail-order options and out-of-network pharmacies.

A pharmacy that is preferred this year may have a different status next year. If that happens, the amount you pay for the same medication may change.

Before enrolling in a plan, confirm that the pharmacy you want to use is in the plan’s network and compare estimated prescription costs at that pharmacy. Routine use of an out-of-network pharmacy can be more expensive and may be covered only in limited circumstances.

5. Premiums, Deductibles and Other Cost Sharing

A Medicare drug plan’s monthly premium, annual deductible, copayments and coinsurance can change for a new plan year.

A plan that had a low premium this year may have a different premium next year. A plan’s deductible may change and your share of prescription costs may also be different at various points during the year.

Review the plan’s Annual Notice of Change, Evidence of Coverage and current plan materials before deciding whether to keep your current coverage or consider another available option.

Review Your Coverage Before the New Plan Year

A Medicare prescription drug plan that fit your needs this year may have different drug coverage, pharmacy access or costs for the coming year. A review during Medicare Annual Enrollment Period can help you understand the available options based on your medications, preferred pharmacy, budget and coverage priorities.

As a Concierge Licensed Health & Life Insurance Agent with Esra Health, I provide one-on-one Medicare plan reviews for individuals throughout Arizona. I can help you compare available plan options based on the information you provide. I do not prescribe medications or make treatment recommendations. For medication-related decisions, speak with your physician, pharmacist or other qualified healthcare provider.

Request a Medicare Plan Review

Schedule Online: Visit the James Little Advisor Page

Direct Phone: (480) 360-1948

Email: james@esra-health.com

Areas Served: East Valley - Chandler, Gilbert, Mesa, Tempe, South Scottsdale, Ahwatukee and communities statewide across Arizona.

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Disclaimer: 

We do not offer every plan available in your area. Currently we represent 13 organizations which offer 133 products in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options.

Esra Health is an independent insurance agency and is not affiliated with, endorsed by or connected to Medicare.gov, CMS or the federal Medicare program. Plan availability and benefits vary by ZIP code and county. This material is designed for general educational purposes only and is not a substitute for a personal consultation about your individual coverage needs, healthcare providers, prescription drugs and budget. Agents are compensated by insurance carriers when a client enrolls in an eligible plan.