Medicare Part D Tier Costs

Your Medicare prescription drug plan categorizes your medications into tiers that have varying costs. Each drug plan can divide its tiers in different ways. Thus, each drug tier costs a different amount. For example, a Medicare drug plan may have the following coverage and costs:

• 1st tier preferred generic drugs with the lowest copays
• 2nd tier non-preferred generic drugs with higher copays
• 3rd tier preferred brand name drugs
• 4th tier non-preferred brand name drugs
• 5th tier specialty drugs

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You can determine whether your prescriptions are generic or brand name by looking at your plan’s drug formulary.

Drug Formulary Costs

According to GoodRx, your medication formulary “is a list of generic and brand name prescription drugs covered by your health plan.” When you use the drugs in your formulary, you will pay less for prescriptions. Furthermore, Medicare.gov says, “if you use a drug that isn’t on your plan’s drug list, you’ll have to pay full price instead of a copayment or coinsurance.” (unless you qualify for a formulary exception).

In most cases, tier 1 and 2 generic drugs will cost less than tier 3 and Specialty tiers. The price you pay for both generic and brand name prescriptions will change depending on your coverage stage. You can learn more about the four stages of drug coverage and costs in 2021.

In the MedicareBob video, Robert Bache says, “most drug plans cover tier-1 medications for $1 or $2, and tier-2 drugs for $3 to $5.” Furthermore, the price you pay for tier-1 and tier-2 prescriptions does not apply towards the Part D deductible. Depending on your Part D drug plan, it can divide tiers in different ways.  

When you provide a list of your prescriptions, Senior Healthcare Direct can shop all available drug plans to find you the most cost-effective. Find out which drug plan will save you the most amount of money based on your prescriptions. Fill out the Part D Drug Finder form.