Medicare drug plans including both Prescription drug plans and Medicare Advantage plans have a formulary that refers to the list of drugs covered by a plan. Every prescription plan has its own formulary that includes both branded and generic prescription drugs. Every Medicare Part D plan offering prescription drug coverage is supposed to provide at least a standard level of coverage set by Medicare. The lists of prescription drugs covered by a plan vary and the manner in which drugs are placed into different tiers on the plan formularies also vary. A panel of experts, the pharmacy and therapeutic committee who don’t have an association with the insurance companies choose the plan’s formulary.
Plan Formularies Effect on Individuals
Enrollees of Medicare prescription drug plans may think that their plan will cover all their prescription drugs but it is not the care. The prescription drug plans do not cover all the drugs instead every plan has its own formulary. Individuals shopping for the prescription drug plans should check the plan’s formulary that may be available at the health insurance portals. Individuals also need to be aware that premium tax relief and state-funded benefits are available to individuals only if they purchase a plan through a health insurance exchange, irrespective of federal, state, or private. To avail the best advantage of the prescription plan, people must select a plan having a formulary that well matches with their usage of prescription drugs and should also ensure that they can fill the prescription at a network pharmacy. If an individual’s prescription drug is not included in their plan’s formulary, then they will require to pay the full price.
Individuals are recommended a specific drug by their physician based on their clinical needs. Most of the commonly prescribed drugs are generally included in the formularies of most of the plans, and these drugs are included in more than one version. The particular plan may have more branded or more generic versions but these plans must meet the FDA and MMC standards. Generally, the health insurers divide their drugs formulary into the following four tiers. There are minor differences in the formulation of these medications but the major difference is in the cost.
Tier 1 of Formulary
The tier 1 plan’s formulary comprises low-cost generic drugs and there is a Co-pay of $20.
Tier 2 of Formulary
Tier-2 of the plan’s formulary includes expensive generic drugs and low cost branded drugs along with a Co-pay of $40.
Tier 3 of Formulary
Tier-3 plan’s formulary has branded drugs with no generic alternative and has the Co-pay of $60.
Tier 4 of Formulary
Tier 4 comprises of high cost and specialty drugs and have Co-pay of over $100.
Individuals will find that their choice of the formulary tier will make a great difference in the premium of their plans. While choosing an insurer, individuals should ensure they are in-network ‘providers’, authorized prescribers, and pharmacies. Mainly because these are easily accessible, or alternatively people can easily receive medications through direct mail at the ‘in-network’ cost.
How Formulary Tiers Affect Individuals
All the drugs covered by the prescription drug plans are required to meet the FDA and MMC requirements, especially generic or multi-source drugs. These drugs must prove their clinical effectiveness just like their branded equivalent. Though, there is a significant price difference between branded and generic drugs. Both insured and insurers wish to keep the drug costs as manageable as possible without affecting their course of treatment. Thus, there is a need for formularies or a list of approved medications that a plan will cover. After meeting their deductible, individuals will have to pay full price for further medications during the plan period.
Things to Consider
Individuals shopping for prescription drug plans need to consider a few additional factors to obtain the best plan and to avail the full benefits from their plans.
Individuals need to know that certain drugs require them or their physicians to obtain prior authorization from the health insurance companies to obtain coverage.
Another factor that individuals need to be aware of if that before being covered for a new or expensive drug they need to first try for a lower-priced or lower-tier drug for the same indication.
Formulary Changes Consequences
There is a possibility that a drug taken by an individual can be removed from his/her insurer’s formulary and the person will be informed about it in writing. In such cases, all the beneficiaries can expect a further 60-day supply. This is done to ensure that they get time to find an alternative to their drugs. However, people can rest assured that no drug is withdrawn unless an effective replacement is found.