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What drugs are covered by Medicare drug plans?

The drugs covered by each plan vary, so there is no single drug list that applies to all plans. All Medicare drug plans must make sure that the people in their plan can get medically-necessary drugs to treat their conditions. Listed below and described on the following pages are some of the coverage rules plans use to make sure that certain drugs are used correctly and only when necessary.

Becoming familiar with these terms will help you make choices about your coverage:
  • Drug Lists (Formularies)
  • Prior Authorization
  • Quantity Limits



Drug Lists (Formularies)

Each Medicare drug plan has a list of prescription drugs that it covers. Plans may cover both generic and brand-name prescription drugs. There are certain drugs that Medicare drug plans aren’t required to cover, such as benzodiazepines, barbiturates, drugs for weight loss or gain, and drugs for erectile dysfunction. Some plans may choose to cover these drugs as an added benefit. In addition, drug plans generally aren’t allowed to cover over-the-counter drugs. Some states may cover these drugs if you have Medicaid.

The drug lists for each plan must include a range of drugs in each prescribed category. This makes sure that people with different medical conditions can get the treatment they need. All Medicare drug plans must generally cover at least two drugs in each category of drugs, but plans can choose which specific drugs are covered in each category. Plans are required to cover almost all drugs in six classes: anti-psychotics, anti-depressants, anti-convulsants, immunosuppressants, cancer, and HIV/AIDS drugs.

All Medicare drug plans have negotiated to get lower prices for the drugs they cover. This means using drugs on your plan’s list will generally save you money. Using generics instead of brand-name drugs can also save you money.


Generic drugs

According to the Food and Drug Administration (FDA), a generic drug is the same as a brand-name drug in safety, strength, quality, the way it works, how it’s taken, and the way it should be used. Generic drugs use the same active ingredients as brand-name drugs and work the same way. Generic drug makers must prove to the FDA that their product performs in the same way as the brand-name drug. Today, almost half of all prescriptions are filled with generics. In some cases, there may not be a generic drug available for the brand-name drug you take. Talk to your doctor.


Tiers

To have lower costs, many plans place drugs into different "tiers" on their lists, which cost different amounts. Each plan can divide its tiers in different ways. Below is an example of how a plan might divide its tiers. A drug in a lower tier will cost you less than a drug in a higher tier.

Example:
  • Tier 1–Generic drugs. Tier 1 drugs will cost you the least amount.
  • Tier 2–Preferred brand-name drugs. Tier 2 drugs will cost you more than Tier 1 drugs.
  • Tier 3–Non-preferred brand-name drugs. Tier 3 drugs will cost you more than Tier 1 and Tier 2 drugs.


Your plan’s drug list may not include a drug you take. However, in most cases, a similar drug that is safe and effective will be available. Your plan’s drug list may change during the year because drug therapies change, new drugs are released, and new medical information becomes available. If there is a change that affects a drug you take, your plan must notify you at least 60 days in advance. You may have to change the drug you use or pay more for it. In some cases, you can continue taking the drug you were on until the end of the year. You can also ask for an exception. See page 57 (What to do if my plan won't cover a drug I need).

Tip: A plan isn’t required to tell you in advance if it removes a drug from its drug list because the FDA takes the drug off the market for safety reasons.



(Primary Source: Centers for Medicare and Medicaid Services - Your Guide to Medicare Prescription Drug Coverage 2008. This content may have been enhanced by Q1Group LLC to include further examples, explanations, and links.)

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