If you are planning on buying Medicare Plan D, also known as the prescription drug plan, you might already know the confusing number of available choices. While it is true that the Plan D is your ticket to affordable health insurance, it can be frustrating when you are already taking medication, and you have to make sure that the Plan D you want to buy covers the prescription. To ensure that the drug you use is covered under Plan D, you should check the plan’s drug formularies.
How different formularies offered by health insurance companies work?
Drug formularies aren’t meant to frustrate you. Formularies of different Plan Ds offered by health insurance companies are intended to help you identify drugs that are medically fit for you and are cost-effective so they can serve the interests of members in that plan.
Private health insurance companies and companies such as The Benefit Link can help you find a program with the drugs you need in its formulary. Private companies that offer prescription drug plans decide what drugs (generic and brand name) are included in the formulary of the programs they offer. The government requires private companies to include most medications that Medicare beneficiaries commonly need to buy.
Different formularies are further divided into groups of drugs based on the cost of the drugs. Depending upon the prescription plan you pick, it may have between two to six groups of medicines.
The drugs that belong to the lowest tier are usually the cheapest drugs for that plan. The plan provider usually negotiates with the drug company to get favorable prices for these drugs. The most affordable medicines in a prescription drug plan are also called preferred generic drugs and have the lowest copayment amount.
As you move up from the lowest tier drugs, you can find nonpreferred generic drugs, preferred brand name drugs, nonpreferred brand name drugs, and exceptionally high-cost drugs.
The higher the tier you move to, the higher the copayments are going to be.
Why formularies are essential when comparing prescription drug plans?
Just like when buying health insurance plans, you should compare prescription drug plans. When you choose a Medicare prescription drug plan, you should pay extra attention to the said plan’s formularies. There are two reasons why paying attention to formularies when choosing a Plan D is extremely important.
One reason is that each plan will have its own unique formulary and decided which drugs are going to be covered and the tiers of each drug. So one Medicare prescription drug plan might cover the medicine you are interested in while another program may not. Similarly, a drug might be on the first tier for one program and in the second tier for another plan.
The second reason why you should consider formularies is because the drug you need may have different prices on different plans. Even if two programs have a particular drug on the same tier, both plans’ copayments might differ. While it may seem confusing to compare and shop for Medicare prescription drug plans, it will be worth it when you find a plan that offers the drugs you need at an affordable price.
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