Revised medication plans for Medicare: Insights into drug plans, available choices, and associated costs
In the complex world of medical insurance, Medicare Part D provides essential coverage for prescription drugs for individuals already enrolled in Medicare Part A or Part B. This coverage is offered through private insurance companies and can be obtained either as a stand-alone Medicare Part D prescription drug plan or as part of a Medicare Advantage plan.
Medicare Part D organises drugs into tiers, each with a different cost-sharing level for beneficiaries. As of 2025, the common Medicare-approved drug tiers and their respective costs generally are as follows:
- **Tier 1 – Preferred Generic Drugs:** Typically have the lowest copayment. For example, some plans have a $0 copayment for this tier. - **Tier 2 – Generic Drugs:** Also often low cost, sometimes $0 copayment similar to Tier 1. - **Tier 3 – Preferred Brand Drugs:** Copayments can range, for instance, from $0 up to about $12.15 per 30-day supply. - **Tier 4 – Non-Preferred Drugs:** Similar copayments to Tier 3, around $0 to $12.15. - **Tier 5 – Specialty Drugs:** These usually have higher cost-sharing, but some plans list them as $0 to $12.15 copayment. They limit fills to 30 days. - **Tier 6 – Select Care Drugs:** Includes some generics for conditions like diabetes, high blood pressure, and cholesterol, often with $0 copayment.
It's important to note that these copayments represent examples from specific plans and can vary by plan and location. Always check the formulary and benefit details of a specific Medicare Part D plan for exact costs.
In addition to tiered copayments, Medicare Part D plans have an annual deductible, an initial coverage phase, and a catastrophic coverage phase. Notably, as of 2025, the Medicare Part D program removed the "donut hole" coverage gap, simplifying the stages to these three. The out-of-pocket maximum was reduced significantly from $8,000 to $2,000, meaning once you have paid $2,000 out-of-pocket for covered drugs, catastrophic coverage kicks in.
Plans vary in their exact copayment or coinsurance amounts and may shift cost-sharing burdens strategically across tiers. The Centers for Medicare & Medicaid Services (CMS) determines which drugs must be included in formularies but generally does not fix their placement on tiers or exact cost-sharing amounts, leading to some plan-to-plan variation.
For more resources to help guide you through this complex world of medical insurance, visit the Medicare hub. The Medicare Open Enrollment Period for Part D plans is from October 15 through December 7, and there is a second enrollment period from January 1 through March 31, when people can change Medicare Advantage plans, which include Part D coverage.
It's crucial to consider a Part D plan even if you do not take prescription drugs because if you delay enrollment, you may incur a premium penalty. People who meet certain criteria, including those who are aged 65 or older, have a qualifying disability and have received Social Security Disability Insurance (SSDI) for more than 24 months, have end stage renal disease (ESRD), have received a diagnosis of amyotrophic lateral sclerosis (ALS), can join a Part D plan.
[1] Medicare.gov, "Medicare Part D Costs," 2021. [2] Healthy Blue Medicare, "Drug Tiers," 2021. [3] Centers for Medicare & Medicaid Services, "Medicare Part D Prescription Drug Plans," 2021.
- Health organizations should consider Medicare Part D's tiered drug coverage system, where preferred generic drugs generally have the lowest copayments, followed by generic drugs, preferred brand drugs, non-preferred drugs, specialty drugs, and select care drugs with varying copayments.
- Despite the variety in copayment amounts and the strategic cost-sharing burdens across tiers, beneficiaries must be aware that these costs represent examples from specific plans and may vary by plan and location.
- The Medicare Part D program, as of 2025, has simplified its stages to include an annual deductible, an initial coverage phase, and a catastrophic coverage phase, having eliminated the "donut hole" coverage gap and reducing the out-of-pocket maximum from $8,000 to $2,000.
- To navigate the complex world of health insurance and Medicare Part D, individuals may find it helpful to visit the Medicare hub during the open enrollment period from October 15 through December 7, or during the second enrollment period from January 1 through March 31, when changes to Medicare Advantage plans, which include Part D coverage, can be made.
