Key Takeaways
- Medicare Part D prescription drug plans use a tiered system to categorize medications, with generic drug options typically in the lowest, most affordable tier.
- Generic drugs must have the same active ingredients, concentration, form, and dosage as their brand-name counterparts, ensuring they are equally effective.
- While Original Medicare (parts A and B) offers limited prescription drug coverage, comprehensive coverage for most medications requires a separate Part D plan. Medicare Advantage plans often include Part D drug coverage.
Medicare Part D prescription drug plans cover most medically essential take-home prescribed medications.
Stand-alone prescription drug plans, or Medicare Advantage (Part C) plans that include prescription drug coverage, must provide a minimum standard coverage level set by Medicare.
Prescription drug plans and Medicare Advantage plans that include prescription coverage can vary in the exact drugs they cover.
Plans will usually have a drug list, also called a formulary, detailing the plan’s covered medications and how it classifies those medications using a tier system.
Often, the most affordable medications are in lower tiers, while the more expensive drugs are in higher or specialty tiers. Tiers typically break down as follows:
- Tier 1 ($): This tier may have generic drug options available.
- Tier 2 ($$): This tier may have insurer-preferred brand-name medications.
- Tier 3 ($$$): This tier may contain nonpreferred brand-name drugs.
- Tier 4 ($$$$): This tier will have specialty medications.
Plans that offer prescription drug coverage are administered by Medicare-approved private insurance companies, so formularies and classifications may vary by plan and insurer.
A brand-name medication is the original drug, manufactured by a pharmaceutical company that created or discovered it.
A pharmaceutical company
- discovery
- research
- testing
- development
- production
- marketing
A patent from the
When the original patent expires, other pharmaceutical companies can apply to the FDA for permission to manufacture and sell a generic version of the original medication.
As the original manufacturer has already performed the required research, testing, trials, and development, new pharmaceutical companies do not need to repeat these steps. This allows for more affordable versions of the same product.
For FDA approval, the new manufacturers of the generic prescription drug must prove their version is the same as the brand-name version in all aspects, including its:
- active ingredients
- concentration
- form, for example, liquid, capsule, or topical
- dosage
Every quarter, the FDA updates a list of
Some of the most commonly prescribed generic medications in the United States include:
| Generic medication | Brand-name medication |
|---|---|
| amlodipine | Norvasc |
| azithromycin | Zithromax, Z-PAK |
| levothyroxine | Synthroid |
| lisinopril | Prinivil or Zestril |
| metformin | Glucophage |
| simvastatin | Zocor |
Part A covers inpatient hospital insurance, so it doesn’t cover your take-home prescription medications. However, if you receive a medication during your hospital admission, Part A will cover eligible costs.
Part B covers outpatient medical services and some limited medications that you receive in a doctor’s office, clinic, or hospital outpatient department, including:
- certain preventive medications, such as flu shots and pneumococcal shots
- injections and IV (administered via a vein) medications
- 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 those for chronic conditions like high blood pressure, you must purchase a stand-alone Part D prescription drug plan or Medicare Advantage plan that includes Part D coverage.
Most Medicare prescription drug plans divide the medications they cover into tiers.
The lowest tier is typically the most affordable and features generic versions of brand-name medications.
Choose a Part D prescription drug plan or a Medicare Advantage plan that includes Part D coverage to ensure you are covered for take-home medications.