Medicare Part D Tier Costs

Read this article to discover the differences in Medicare Part D tier costs. Medicare categories your medications into one of the following five drug tiers:

  • 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

Estimated reading time: 3 minutes

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

Medicare Part D Tier Costs bar graph shows rising drug cost
Bar graph shows rising drug cost for each drug tier

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. However, 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.” 

In most cases, tier 1 and 2 generic drugs will cost less than tier 3 and 4 brand name drugs. 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.

Senior at pharmacy with pharmacist wearing face mask
Senior at pharmacy with pharmacist during COVID-19.

Medicare Part D Costs for Tier 1 and 2

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 do not apply towards Part D deductible. However, Part D deductible does apply towards tiers 3, 4, and 5.  

Medicare Part D Costs for Tiers 3, 4, and 5

You pay the full prescription cost in tiers 3, 4, and 5 until you reach the $445 Part D deductible in 2021. Then you pay a 25% copay until you spend a total of $4,130. Once you have spent $4,130 in 2021, you enter the Donut Hole. Then you pay 25% on all drugs (tier 1 – tier 5) until you spend $6,550. After $6,550, you pay $3.70 for generic / $9.20 for brand name or 5% whichever is greater.

Senior Healthcare Direct can help you choose a drug plan that saves you the most money per year.

Medicare Part D costs prescription bottle with hunder dollar bill

Choosing a Cost-Effective Drug Plan

Senior couple sitting inside on couch

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.