To make the most of your Medicare Part D plan, it's important to understand its ins and outs. This post offers simple yet vital tips to navigate your prescription drug coverage, helping you save money and ensure your healthcare needs are met. From grasping formularies to exploring pharmacy options, you will be able to arm yourself with the knowledge needed to make the most out of your Part D Prescription Drug plan.

Navigating your Medicare Part D prescription drug plan

You must understand your Part D coverage to ensure all your healthcare needs are met and that you are on the most cost-effective plan. Here is a checklist of topics to pay attention to throughout the year and during Open Enrollment.

Understand your plan’s formulary

Each Part D plan has a formulary or list of covered drugs. Each plan’s formulary must include at least two drugs in the most commonly prescribed categories and classes. However, the specific drugs vary depending on your plan.

Check if your current medications are on the list and understand any coverage restrictions or limitations. If your current medication is not on the list, ask your doctor or other healthcare provider if another similar medication on your plan’s formulary might work for you.

Review the plan tiers

While a plan’s formulary provides a list of covered drugs, the plan’s tiers show how much you can expect to pay for those medications. Generally, a drug in a lower tier will have a lower copayment or coinsurance than one in a higher tier.

If your healthcare provider thinks you need a specific drug on a higher tier, you may try to get an exception.

Understand your plan’s premiums and deductible

Part D premiums vary from plan to plan

Some Medicare Part D plans don’t have a deductible. Other plans have deductibles that may be as high as $545. In plans with a deductible, drugs on some tiers are covered before the deductible.

Besides understanding your monthly premium, ensure you know if your plan has a deductible - and how it works.

Watch for coverage changes throughout the year

It’s important to note that your Medicare drug plan can change its formulary during the year. In addition, your coinsurance may increase for a particular drug if the manufacturer raises the price or a new generic drug comes on the market. Watch for notices from your Medicare Part D plan regarding these changes to your out-of-pocket costs.

Understand step therapy

Some Medicare Part D prescription drug plans utilize step therapy. This process requires patients to try less expensive or preferred medications before moving on to higher-priced alternatives. The goal of step therapy is to control drug costs while still providing effective treatment.

Step therapy can be a source of frustration for some people. Understanding your health plan policies means you will not face unwelcome surprises regarding coverage. Understanding how step therapy works will also enable you to work with your healthcare provider to provide documentation and appeal any medication decisions through your plan's appeals process.

Consider generic drugs

Generic drugs are often more cost-effective than brand-name drugs and usually have the same active ingredients. As you review a plan’s formulary, you may notice a generic version of your preferred medication that will allow you to lower your out-of-pocket costs.

Understand your pharmacy options

Some plans have preferred pharmacy networks where you can get your medications at a lower cost. Check if your plan has a preferred pharmacy and consider using it to save money.

Some Part D plans offer discounts or lower co-pays for medications when ordered through a mail-order pharmacy. This can be convenient for maintenance medications.

It’s also worth noting that due to the recent coronavirus pandemic, Medicare Part D plans must provide a 90-day supply of covered Part D drugs to enrollees who request it.

Be aware of prior authorization rules

You may need prior authorization from your insurance company before you can be prescribed a drug. Your prescriber may need to show that the drug is medically necessary before your plan covers it.

Be aware of the coverage gap

Most Medicare Part D plans have a coverage gap known as a "donut hole." If you spend more than $5,030 in covered drugs in 2024, you may enter a coverage gap. Be aware of when you might enter this phase so you can plan accordingly.

It’s worth noting that the Inflation Reduction Act gives some relief to those whose out-of-pocket spending reaches $8,000. If you reach this level of expenditure, you’ll automatically get catastrophic coverage, which means you won’t have to pay a copayment or coinsurance for covered Part D drugs for the rest of the calendar year.

Utilize Medication Therapy Management (MTM) programs

Many Part D plans offer MTM programs, where pharmacists review your medications to ensure they are safe and effective. Take advantage of these services to optimize your drug therapy.

Look for Extra Help if needed

If you have a limited income, you may qualify for Extra Help, a program that helps with Medicare prescription drug coverage costs. Check your eligibility for this low-income subsidy and apply through the Social Security Administration.

In addition, some pharmaceutical companies and non-profits offer assistance programs for those struggling with prescription drug costs. Explore these options to find additional support.

Periodically review your prescription drug coverage before your Open Enrollment period

Plans can change annually, including premiums, covered drugs, and copays. Make sure your plan still meets your needs. Compare it to other stand-alone Part D plans (or a Medicare Advantage plan that includes prescription drug coverage).