Key Takeaways
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Check your plan every year – Medicare drug coverage can change annually, so reviewing your options during the Open Enrollment Period can save you from unexpected costs.
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Understand formularies and tiers – Each Medicare plan has a list of covered drugs, and different pricing tiers determine how much you’ll pay out of pocket.
Understand How Medicare Covers Prescription Drugs
Medicare prescription drug coverage is available through two main options:
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Medicare Part D (Standalone Drug Plans): If you have Original Medicare, you can enroll in a separate Part D plan for prescription drug coverage.
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Medicare Advantage (Part C) Plans with Drug Coverage: Many Medicare Advantage plans include prescription drug coverage bundled with medical benefits.
Since each plan sets its own list of covered drugs (formulary) and cost-sharing amounts, it’s important to review your plan carefully.
1. Review the Medicare Formulary Before Enrolling
Each Medicare drug plan has a formulary—a list of covered prescription medications. This list categorizes drugs into different tiers, which affect how much you pay:
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Lower tiers usually include generic drugs with lower copays.
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Higher tiers typically consist of brand-name or specialty drugs that cost more.
Steps to Ensure Your Medication Is Covered:
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Check the plan’s formulary before enrolling or switching plans.
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Look for any restrictions, such as prior authorization or quantity limits.
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Compare different plans to see which covers your prescriptions at the lowest cost.
2. Use the Annual Open Enrollment Period to Make Changes
Medicare plans change their formularies, premiums, and copays every year. That means the drug coverage you had last year may not be the best fit this year.
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Medicare Open Enrollment: Runs from October 15 to December 7 each year, allowing you to switch or update your Part D or Medicare Advantage plan.
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Medicare Advantage Open Enrollment: From January 1 to March 31, if you already have a Medicare Advantage plan, you can switch to a different one or return to Original Medicare.
What You Should Do:
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Check for any changes to your current plan’s formulary.
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Compare other available plans to find the best coverage for your medications.
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Make necessary changes before the deadline to avoid coverage gaps.
3. Verify Preferred Pharmacies for Lower Costs
Most Medicare Part D and Medicare Advantage plans have a network of preferred pharmacies that offer lower copays and discounts on prescription drugs.
How to Save Money:
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Use a preferred pharmacy listed by your plan.
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Check for mail-order pharmacy options, which can sometimes offer even lower costs.
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Avoid out-of-network pharmacies, as they may charge significantly more for the same medication.
4. Apply for Extra Help If You Have Limited Income
If you have a lower income and need assistance covering prescription drug costs, you may qualify for Extra Help, a federal program that reduces:
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Monthly premiums
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Annual deductibles
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Copays and coinsurance
Eligibility Considerations:
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Medicare automatically enrolls those who qualify based on Medicaid or Supplemental Security Income (SSI).
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If you’re not automatically enrolled, you can apply through Social Security at any time during the year.
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The income and resource limits for 2025 determine eligibility, so check if you qualify.
5. Watch Out for the Medicare Part D Coverage Phases
Medicare Part D plans have four phases that impact how much you pay out of pocket:
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Deductible Phase: You pay the full cost of prescriptions until you meet the plan’s deductible (up to $590 in 2025).
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Initial Coverage Phase: After meeting the deductible, you pay a copay or coinsurance until total drug spending reaches $5,030.
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Catastrophic Coverage Phase: Once you spend $2,000 out of pocket, Medicare covers 100% of covered drugs for the rest of the year.
Steps to Avoid Unexpected Costs:
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Monitor your spending to understand where you are in the coverage phases.
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Ask your doctor about generic alternatives to reduce costs.
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Use manufacturer assistance programs if available for your medications.
6. Consider Medication Therapy Management (MTM) Programs
Medicare requires drug plans to offer Medication Therapy Management (MTM) services for eligible beneficiaries, typically those with multiple chronic conditions who take several medications.
Benefits of MTM:
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A pharmacist or health professional reviews your medications to prevent drug interactions and side effects.
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You receive personalized recommendations to optimize medication effectiveness.
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Some plans offer comprehensive medication reviews (CMRs), which can lead to lower costs and better health outcomes.
Get the Right Medicare Drug Coverage Without the Hassle
Navigating Medicare drug coverage can seem overwhelming, but staying informed and proactive ensures you get the best possible plan for your needs. By reviewing formularies, using preferred pharmacies, and checking for cost-saving programs, you can avoid unnecessary expenses and coverage issues. If you need personalized advice, get in touch with a licensed agent listed on this website to find the best Medicare prescription drug coverage for you.
