Medicare covers prescription drugs, but not all of them, and the amount you pay depends on which Medicare plan you have and which drug you need.

If you have Original Medicare (Part A and Part B), you need to add Part D — a separate prescription drug plan — to get drug coverage. Part D is run by private insurance companies approved by Medicare, and each plan has its own list of covered drugs, called a formulary. If you have Medicare Advantage (Part C), prescription drug coverage is usually built in, though you still choose which drugs are covered based on that plan's formulary.

The drugs Medicare covers are not the same as the drugs your doctor prescribes. Your plan's formulary lists which medications it will pay for. If your doctor prescribes a drug that is not on your plan's formulary, you have options: you can pay out of pocket, ask your doctor to prescribe a different drug that is covered, or request that your plan make an exception and cover the drug anyway.

Key Takeaways

  • Original Medicare does not cover prescription drugs unless you add Part D; Medicare Advantage plans usually include drug coverage automatically.
  • Each Part D and Medicare Advantage plan has its own formulary — the list of drugs it will pay for — and formularies change every year.
  • You can ask your plan to cover a drug not on its formulary through a process called a formulary exception, which usually takes a few business days.
  • Your out-of-pocket costs for the same drug vary widely depending on which plan you choose, so comparing plans during open enrollment can save you hundreds of dollars per year.
  • If a drug costs more than your plan's out-of-pocket limit, Medicare pays the rest once you reach that limit.

How Part D Coverage Works

Part D is optional, but if you do not sign up when you first become may be able to access at age 65, you pay a penalty for every month you go without it — even if you do not take any medications right now. The penalty is added to your Part D premium for as long as you have Medicare. If you enroll late, the penalty is about 1% of the national average Part D premium for each month you were without coverage, though the exact amount changes yearly.

When you choose a Part D plan, you are choosing from dozens of plans offered by different insurance companies. Each plan covers different drugs at different costs. The same medication might cost $10 a month under one plan and $50 under another. During the annual open enrollment period — October 15 to December 7 each year — you can switch to a different plan or add Part D if you do not have it.

Once you enroll in Part D, your coverage follows a structure with different cost stages. You pay a monthly premium, then a yearly deductible (the amount you pay before the plan starts helping), then a copay or coinsurance for each prescription. The amounts and deductibles vary by plan.

What Happens When Your Drug Is Not on the Formulary

If your doctor prescribes a medication that your Part D plan does not cover, you have three paths forward. The first is to ask your doctor if there is a similar drug on your plan's formulary that would work for you instead — this is often the fastest solution. The second is to pay for the uncovered drug out of pocket while staying in your plan. The third is to request a formulary exception.

A formulary exception is a formal request asking your plan to cover a drug it normally does not cover. Your doctor usually submits this request on your behalf, though you can submit it yourself. The plan reviews the request — usually within 24 to 72 hours for urgent cases, or up to 14 days for standard requests — and decides whether to cover the drug. Plans often approve exceptions when your doctor explains that you have tried other covered drugs and they did not work, or that you have a medical reason you need this specific drug.

If your plan denies the exception, you can appeal. Your doctor can provide additional medical information supporting why you need that specific drug. The appeals process takes longer but gives you another chance to get the drug covered.

How Much You Pay for Covered Drugs

Your out-of-pocket costs for a covered drug depend on which stage of the Part D benefit you are in. In the initial coverage stage, you pay a copay (a flat amount like $5 or $10) or coinsurance (a percentage of the drug's cost, like 25%). Once your total out-of-pocket spending reaches a certain amount — called the out-of-pocket limit — you move to catastrophic coverage, where Medicare pays most of the cost and you pay a small copay.

The out-of-pocket limit changes yearly. Once you reach it, your plan covers the rest of your drug costs for the rest of that calendar year. This protects you from unlimited costs if you take expensive medications or many medications at once.

Some drugs cost more than others, and your plan may charge higher copays for brand-name drugs than for generic versions of the same medication. If your doctor prescribes a brand-name drug when a generic is available, you can ask whether the generic would work for you — it usually costs less and works the same way.

Medicare Advantage Drug Coverage

If you have Medicare Advantage instead of Original Medicare, your plan almost always includes prescription drug coverage. You do not need to sign up for Part D separately. However, Medicare Advantage plans still have formularies, and you still pay copays or coinsurance for covered drugs. The costs and covered drugs vary from plan to plan, just as they do with Part D.

Medicare Advantage plans can change their formularies during the year, though they must notify you of major changes. If a drug you are taking gets removed from your plan's formulary mid-year, your plan usually gives you a grace period to switch to a different plan or to Original Medicare plus Part D, even outside the normal open enrollment window.

Comparing Plans and Choosing Coverage

Because costs vary so much from plan to plan, comparing your options before you enroll — or during open enrollment each year — can save you significant money. Medicare offers a tool called the Medicare Plan Finder on Medicare.gov where you can enter the specific drugs you take and see how much each plan would charge you for them.

To use the Plan Finder, you will need a list of your current medications, including the strength and how often you take them. The tool shows you the monthly premium, the deductible, and your estimated yearly out-of-pocket costs for each plan. Some plans may have no deductible, while others may have lower copays for your specific drugs. Spending 30 minutes comparing plans can reveal savings of hundreds of dollars per year.

If you are already enrolled in a plan and your medications or costs change, you can switch plans during open enrollment. If you have a major life change — such as losing other insurance or moving to a different state — you may be able to switch outside of open enrollment as well.

What to Ask Your Doctor and Pharmacist

Before your doctor prescribes a new medication, ask whether it is on your Part D or Medicare Advantage formulary. Your pharmacist can also check this for you when you fill the prescription. If the drug is not covered, ask your doctor if there is a covered alternative that would work for you.

If you are paying more than you expected for a drug, ask your pharmacist whether a generic version is available, or whether your plan covers a different strength or quantity that might be cheaper. Sometimes splitting a higher-dose pill in half costs less than buying the lower dose, though you should only do this if your doctor agrees it is safe.

If you cannot afford your medications even with Medicare coverage, tell your doctor or pharmacist. Pharmaceutical companies offer patient information programs for people with low incomes, and your doctor may know about programs specific to the drugs you take.

When to Contact Medicare or Your Plan

Contact your Part D or Medicare Advantage plan if a drug you need is not covered and you want to request a formulary exception. You can call the customer service number on your insurance card, and your doctor can submit the request on your behalf. Keep records of the request and follow up if you do not hear back within the timeframe your plan promised.

If you believe your plan made a mistake — such as charging you the wrong copay or denying a formulary exception unfairly — you have the right to appeal. Your plan must tell you how to file an appeal when they deny a request. The appeals process is free and does not require a lawyer.

If you have questions about whether a specific drug is covered, call Medicare directly at 1-800-MEDICARE (1-800-633-4227) or visit Medicare.gov. You can also contact your State Health Insurance information Program (SHIP), which offers free counseling about Medicare coverage questions in your state.

Frequently Asked Questions

Do I have to take the generic version of a drug if my plan covers it?

No. If your plan covers a generic version but your doctor believes the brand-name drug is medically necessary for you, you can ask for a formulary exception. However, you may pay more out of pocket if you choose the brand-name version when a generic is available and covered.

What happens to my drug coverage if I switch from Original Medicare to Medicare Advantage?

Medicare Advantage plans include drug coverage, but the covered drugs and costs are different from your Part D plan. During the switch, your old Part D coverage ends. Make sure the drugs you take are covered under your new Medicare Advantage plan before you enroll, using the Medicare Plan Finder tool.

Can my plan remove a drug from its formulary in the middle of the year?

Part D plans can remove drugs mid-year, though they must notify you in advance. If a drug you are taking is removed, your plan usually allows you to switch to a different plan or to Original Medicare plus Part D outside of the normal open enrollment window.

What if I cannot afford my copays even with Medicare coverage?

If your income is low, you may may have access to for Extra Help, a federal program that lowers your Part D costs. You can also ask your doctor or pharmacist about patient information programs run by drug manufacturers. Some nonprofits also offer medication cost information for seniors.

How do I know if my plan's formulary has changed for the next year?

Your plan mails you a notice of formulary changes in September or early October each year, before open enrollment begins. You can also check the Medicare Plan Finder or call your plan directly to see what drugs are covered for the upcoming year.