- Medicare tiers are levels of coverage for prescription medications.
- The tier that a medication is assigned to determines how much you’ll pay for it.
- Be sure that any medication you take is included in at least one tier of a prescription plan before you enroll in it.
All Medicare Part D prescription drug plans or Medicare Part C (Advantage) plans that include prescription drug coverage must provide, at a minimum, a standard level of coverage set by Medicare.
These plans can vary, however, when it comes to the list of prescription drugs they cover. This list is called a formulary, and it classifies medications into tiers.
Because Medicare Part D and Advantage plans are purchased through Medicare-approved private companies, the medications they cover can differ. These plans can also vary in how they organize drugs into different tiers within the formulary for pricing purposes.
Plans typically divide the medications in their formularies into tiers.
They use these tiers to lower drug costs. Each tier costs a different amount. Typically, the lower tiers cost less than the higher ones.
Your plan’s tiers may differ from those of other plans, but here’s an example of how they may be set up:
- cost sharing tier 1: most generic prescription drugs; lowest copayment
- cost sharing tier 2: preferred, brand name prescription drugs; medium copayment
- cost sharing tier 3: nonpreferred, brand name prescription drugs; higher copayment
- cost sharing tier 4: very high-cost prescription drugs; highest copayment
Medications may be either brand name or generic, depending on who manufactures it. Read on to discover other differences and similarities.
The brand name is the original drug. It’s usually made by the manufacturer who created or discovered it. A pharmaceutical company has invested money in the drug’s:
The pharmaceutical company’s investment in the “brand” is protected by a patent. This keeps other drug manufacturers from duplicating the formula and the drug.
When the patent granted to the originating pharmaceutical company expires, other pharmaceutical companies can then apply to the Food and Drug Administration (FDA) for permission to manufacture and sell a generic version of the original.
For FDA approval, the producers of the generic prescription drug must prove their version is the same as the brand name medication in all aspects, including:
- active ingredients
- form (liquid, capsule, topical, etc.)
According to Harvard Medical School, research indicates that generic medication is just as effective as brand name versions.
And according to Cedars-Sinai, generic prescription drugs are as safe as brand name versions. Plus, they’re continually monitored based on FDA guidelines for quality, efficacy, and safety.
Turn to the FDA to find the generic equivalent of a medication. Every quarter, the FDA updates a list of
What are the most popular generics?
Some of the most commonly prescribed generic medications in the United States include:
Original Medicare is made up of Part A and Part B. Medicare Part A is hospital insurance, so it doesn’t cover your prescription medications; however, if you receive a medication while you’re an inpatient in a setting like the hospital, Part A will cover it.
Medicare Part B is medical insurance. Although it doesn’t cover most medications you get at the drugstore, it does include limited drug coverage. This includes:
- certain preventive medications (flu shots, pneumococcal shots)
- injections you get in a doctor’s office
- drugs used with some types of durable medical equipment
- certain oral cancer drugs
- certain medications in a hospital outpatient setting
To get Medicare coverage for most prescription drugs, including for chronic conditions such as high blood pressure, you must purchase a Medicare Part D or a Medicare Advantage (Part C) plan that includes prescription drug coverage.
If you think a Medicare prescription drug plan is right for you, compare plans in your area and choose one that meets your needs and includes your medications on its formulary.
If you have purchased or are considering purchasing Medicare Part D or a Medicare Advantage (Part C) plan that includes prescription drug coverage, you’ll most likely see tiers for different medications.
Most Medicare prescription drug plans divide the medications they cover into tiers that each cost a different amount. The lowest tier is typically the lowest cost and features generic versions of brand name medications.
Generic prescription drugs are lower priced than brand name medications that no longer have a patent. Approved by the FDA, generic medications are considered as effective as their brand name counterparts.