Understanding a Medicare formulary helps you know which drugs your plan covers and how much you’ll pay. A formulary is the official drug list your Medicare plan uses to decide coverage, cost tiers, and any rules like prior authorization or step therapy—so checking it can save you money and avoid surprises at the pharmacy.
This article will walk you through how formularies work, the types and tiers you might see, and what to do when a drug isn’t covered.
You don’t have to figure this out alone. The Modern Medicare Agency connects you with licensed agents who talk with you one-on-one, compare plans based on your prescriptions, and help find coverage that fits your budget without extra fees.
Keep reading to learn how to use a formulary, handle changes, and lower your prescription costs.
What Is a Medicare Formulary?
A Medicare formulary lists the prescription drugs a plan covers, shows cost tiers, and notes limits like prior authorization. It tells you which drugs you can fill and how much you may pay at the pharmacy.
Definition and Purpose
A formulary is a plan’s official drug list for Medicare Part D and Medicare Advantage plans with drug coverage. It names both brand-name and generic medicines that the plan will pay for either fully or partially.
Formularies also organize drugs into tiers—usually lower tiers mean lower copays. The main purpose is to guide your coverage choices and predict out-of-pocket costs.
It helps you compare plans by checking if your current medicines are covered. If a drug isn’t listed, you may pay the full cost unless you request an exception or appeal.
How Formularies Work in Medicare
Each Medicare Part D or Medicare Advantage plan maintains its own formulary, so coverage varies by plan and can change each year. Plans place drugs into tiers that affect your copay or coinsurance.
Common rules you’ll see include prior authorization (approval before coverage), step therapy (try a cheaper option first), and quantity limits. You should review the formulary during open enrollment and when your medicines change.
If your drug needs a prior authorization, your prescriber submits paperwork. If a drug is not covered, you can ask the plan for an exception or speak with one of our licensed agents at The Modern Medicare Agency to find a plan that lists your medicines.
Key Differences From Commercial Formularies
Medicare formularies follow federal rules, but plans still have flexibility in drug choices and tier placement. Commercial formularies (employer or private insurance) may use different tier structures, network rules, or rebate arrangements that change cost-sharing for the same drug.
Another difference is appeals and protections. Medicare offers a formal exception and appeals process designed for beneficiaries.
Commercial plans might have different timelines or internal review steps. If you want direct help comparing formularies and finding plans that match your meds and budget, The Modern Medicare Agency provides licensed agents you can talk to one-on-one who will search options without adding extra fees.
Types of Medicare Formularies
Formularies differ by plan type, what drugs they list, and how they group costs and rules. You’ll learn how Part D and Medicare Advantage formularies work and the key differences between standard and custom lists.
Medicare Part D Formularies
Medicare Part D formularies list drugs covered by standalone prescription plans. Each plan must include at least two drugs in six protected classes by law, but plans vary on specific brand and generic options.
Formularies use tiers—usually 5 tiers in 2025—to set cost sharing. Lower tiers cover generics and preferred generics; higher tiers cover brand-name, specialty, or non-preferred drugs.
Plans often apply restrictions like prior authorization, step therapy, and quantity limits. These rules can affect your out-of-pocket cost and access.
You should check a plan’s formulary before enrolling to confirm your regular medicines are covered and learn what tiers and restrictions apply.
Medicare Advantage Drug Formularies
Medicare Advantage plans that include drug coverage (MA-PD) combine medical and prescription benefits. Their formularies work like Part D but can integrate care coordination features.
You get one ID card and a single plan network for medical and pharmacy benefits in many cases. MA-PD formularies may offer different preferred pharmacies or tiered copays tied to plan networks.
They also follow federal rules for protected classes, but drug choices and utilization rules can differ from standalone Part D plans. Ask an agent to compare formulary details, network pharmacy lists, and any extra plan incentives that lower your prescription costs.
Standard vs. Custom Formularies
Standard formularies follow common tier structures and include most widely used drugs across classes. They make it easier to compare plans because many plans use a similar baseline of covered medicines.
Standard lists often simplify switching between plans without large coverage gaps. Custom formularies let plans target specific drugs or cost strategies.
They may favor certain generics, include selective brands, or apply unique utilization rules. Custom lists can lower premiums but raise copays for some drugs.
You should review drug tiers, step therapy, and prior authorization on a plan’s formulary to avoid surprises.
Formulary Tiers and Drug Coverage
Formularies decide which drugs your plan covers, how much you pay, and any rules for getting them. Knowing tier levels, specialty drug rules, and generic vs. brand choices helps you pick the best plan for your prescriptions.
Generic vs. Brand-Name Coverage
Generics usually cost you less and work the same as brand-name drugs because they contain the same active ingredients. Medicare formularies commonly place generics in the lowest tiers with the smallest copays or coinsurance, so choosing generics can cut your out-of-pocket costs.
Some brand-name drugs appear on formularies at higher tiers or with prior authorization requirements. If your doctor thinks a brand-name medicine is necessary, you can request an exception or step therapy review from your plan.
Keep a list of your current prescriptions and check each plan’s formulary before you enroll.
The Modern Medicare Agency helps you compare how plans list your drugs. Our licensed agents review formularies with you one-on-one and show where generics or preferred brands fall on each drug list.
Specialty Medications
Specialty medications treat complex or rare conditions and often cost much more than regular drugs. Plans usually place them in a separate “specialty” tier, which means higher cost-sharing and stricter rules like prior authorization or quantity limits.
You may need to use a specific specialty pharmacy or get approval before the plan will pay. Ask your plan about coverage caps, step therapy, and whether a manufacturer assistance program can reduce costs.
Track annual out-of-pocket limits for specialty drugs since these can quickly exhaust your benefits. The Modern Medicare Agency’s agents know which plans offer better specialty drug support.
They walk you through specialty tier rules and help find plans that limit your expenses while keeping access to necessary medicines.
Tier Structures and Costs
Most Medicare plans use a tiered formulary, commonly with 5 or 6 tiers. Typical tiers look like this:
- Tier 1: Preferred generics — lowest cost
- Tier 2: Non-preferred generics or preferred brands — low to moderate cost
- Tier 3: Preferred brand-name drugs — moderate cost
- Tier 4: Non-preferred brands — higher cost
- Tier 5: Specialty drugs — highest cost
Plans may use different names or add tiers for biosimilars or specialty generics. Copays and coinsurance increase as you move up tiers.
Also watch for rules like prior authorization, step therapy, and quantity limits that affect access and cost. You can save money by comparing formularies and total expected yearly costs, not just monthly premiums.
Formulary Updates and Changes
Medicare formularies change to control costs, add safer or generic options, and meet regulatory rules. You need to watch annual reviews, midyear adjustments, and how plans must tell you about changes.
Annual Review Process
Each plan updates its formulary every year, usually effective January 1. During the annual review, the plan’s medical committee of doctors and pharmacists looks at clinical evidence, new drugs approved by FDA, and cost trends.
They decide which drugs to add, remove, or move between tiers. You should get an updated formulary and a summary of benefits before open enrollment so you can compare plans and estimate your costs for the coming year.
Pay close attention to tier changes and step therapy additions. A drug moved to a higher tier can raise your copay or coinsurance.
If a drug is removed, the plan often lists alternative drugs and instructions for prior authorization or exceptions if you need to stay on the current medicine.
Midyear Changes
Plans may change formularies midyear only for specific reasons: safety risks, new clinical data, or if a manufacturer stops supplying a drug. They must follow Medicare rules and show why the change matters clinically or practically.
If your drug is affected, the plan must offer a temporary supply while you transition or allow exceptions if your prescriber documents medical need. You should regularly check the plan’s online formulary updates, especially if you rely on specialty or brand-name meds.
Make a plan with your prescriber ahead of time: ask about alternatives, how prior authorization works, and how long a transition supply will last.
Notification Requirements
Medicare plans must notify you in writing before most formulary changes take effect. You should receive specific notices for removals, tier increases, or new restrictions.
Notices must explain the reason, the effective date, and your options, such as requesting an exception, appealing, or switching drugs. If you need help interpreting a notice, contact The Modern Medicare Agency.
Our licensed agents are real people you can speak to 1 on 1. They will review your current prescriptions, explain the notice in plain language, and identify Medicare packages that match your needs without extra fees that break the bank.
Use our help to avoid surprises and keep your treatments covered.
How to Use a Medicare Formulary
A formulary tells you which drugs a plan covers, what tier they’re in, and any rules like prior authorization or step therapy. You’ll learn how to check if your medicine is covered, find lower-cost options, and get help from plan representatives or The Modern Medicare Agency.
Checking Covered Medications
Look up your plan’s formulary by plan name and year on the plan website or your member portal. Search for each drug by its generic and brand name to confirm coverage and see the drug tier.
Tiers affect your cost: lower tiers usually mean lower copays. Note any restrictions listed next to a drug: prior authorization, quantity limits, or step therapy.
If a drug says “PA” or “QL,” that means extra approval or limits are required before the plan pays. Keep a copy or screenshot of the formulary page for your records.
Check if the formulary separates coverage between Part B and Part D for drugs like injectable treatments. Also verify the pharmacy network—some drugs cost less at certain pharmacies or through mail-order.
If you’re switching plans, compare formularies before you enroll.
Finding Alternatives
If your drug isn’t covered or is too costly, look for covered alternatives. Search the formulary for the generic version first; generics usually cost much less and are often in lower tiers.
The formulary may list therapeutic alternatives in the same class. Ask your prescriber to consider a formulary-preferred alternative or to submit a justification for a non-covered drug.
You can also compare costs for the same drug at retail, in-network specialty, and mail pharmacies. Use the plan’s cost estimator tool when available.
If step therapy applies, your prescriber may need to try an approved drug before the plan will cover your preferred medicine. Keep documentation of medical need and past treatments to support exceptions or appeals.
Contacting Plan Providers
Call your plan’s customer service for quick answers about coverage rules, prior authorization steps, and pharmacy options. Have your member ID, drug names (generic and brand), and current prescriptions ready when you call.
Note the representative’s name and the date of the call. If the plan denies coverage, request a formulary exception or file an appeal.
Your prescriber can submit supporting medical records and a letter of medical necessity. Track deadlines: plans set timeframes for standard and expedited decisions.
You can also contact The Modern Medicare Agency for one-on-one help. Our licensed agents explain formularies in plain language, compare plan drug lists for you, and help submit paperwork without extra fees.
Call or schedule a free consult to have an agent review your medications and find plans that match your needs.
Exclusions and Limitations
Medicare formularies list which drugs a plan covers, but many drugs face limits or exclusions that affect your access, costs, and how you get refills. Know which medicines may be left off the list, which drugs have dose or supply caps, and when your prescriber must justify coverage.
Drugs Not Covered
Some drugs never qualify for Part D coverage. These often include medications for cosmetic use, appetite suppression, or experimental therapies.
Also, drugs covered under Part A or Part B—like certain inpatient drugs or infusion drugs billed to medical benefits—won’t appear on a Part D formulary. Plans can exclude specific brand-name drugs when a generic or therapeutic alternative exists.
If your drug is excluded, you can ask your prescriber to request an exception from the plan. The Modern Medicare Agency can help you check formularies and submit exception requests so you don’t pay out-of-pocket for an uncovered medication unnecessarily.
Quantity Limits
Plans may impose quantity limits that cap the amount you can fill at once or over a set period. Limits aim to prevent misuse and control costs, but they can affect chronic therapy and dosing schedules.
Common quantity limits include monthly pill counts, day-supply caps for controlled substances, or reduced units per prescription for specialty drugs. If your usual dose exceeds the limit, your prescriber must request an override or supply a medical justification.
The Modern Medicare Agency’s licensed agents will review your plan’s quantity rules and help arrange prior authorization or appeals when limits threaten your treatment continuity.
Prior Authorization Requirements
Prior authorization requires your prescriber to get approval before the plan covers a drug. Plans use this to ensure clinical appropriateness, step through preferred therapies, or confirm safety for high-risk medicines.
You’ll usually need to provide medical records, prior treatment history, and a provider statement explaining why alternatives won’t work. Decisions must follow specific timelines set by Medicare; if denied, you can appeal.
The Modern Medicare Agency connects you directly with licensed agents who guide the paperwork, fast-track provider statements, and explain appeal options so you can keep your therapy on schedule.
Appeals and Exceptions Process
You can ask your plan to cover a drug not on the formulary or to lower your cost for a drug that has higher cost-sharing. You can also appeal a denial or a prior authorization decision if the plan won’t approve a drug you need.
Requesting an Exception
You or your prescriber can request a formulary exception when your plan won’t cover a drug you need. State why the formulary drug is not appropriate, using medical reasons and past treatment history.
Include clinical notes, test results, and the prescriber’s statement that alternatives failed or would harm you. You may request a tiering exception to pay the lower cost for a drug placed in a higher cost tier.
Ask for a tiering exception if a cheaper alternative causes side effects or is ineffective. Plans must respond within set timeframes; ask your plan about expedited review if waiting would risk your health.
If you want help with forms or documentation, contact The Modern Medicare Agency. Our licensed agents are real people you can speak to 1 on 1, and they will help gather the needed records and submit the request without added fees.
Appeal Steps
Start appeals with your plan’s redetermination (Level 1). Follow the plan’s appeal form or call customer service to file.
Provide the same medical evidence you used for the exception request and any new information that supports why you need the drug. If the plan denies the redetermination, you can request a reconsideration by an independent review entity (Level 2).
Keep copies of all notices, dates, and the names of people you speak with. If needed, you can escalate to an administrative law judge and then to federal court, following federal deadlines and rules.
Get help from The Modern Medicare Agency at any step. Our agents explain deadlines, prepare documents, and represent your needs so you meet appeal timelines and increase your chance of approval.
Factors Affecting Formulary Inclusion
Formularies balance drug benefit, patient needs, and program rules. Clinical data, price and rebates, and Medicare rules shape whether a drug appears and where it sits on a plan’s tiered list.
Clinical Effectiveness
Plans look for clear evidence that a drug treats the target condition better than alternatives. You should expect review of randomized trials, real-world outcomes, safety profiles, and guideline endorsements.
If a drug shows better symptom control, fewer hospitalizations, or a safer side‑effect profile, plans are more likely to include it on a preferred tier. Clinical committees often compare drugs in the same class for unique benefits, dosing convenience, or interactions that matter to older adults.
They also consider whether a drug fills an unmet need when existing options fail or are not tolerated. Your individual medical needs can affect coverage if a plan allows exceptions or step therapy waivers.
Cost Considerations
Plans weigh both list price and net cost after rebates. A lower net cost helps a drug land on a lower cost-sharing tier, which reduces your out‑of‑pocket spending.
Insurers also consider volume forecasts: a drug used by many enrollees may receive different placement than a niche product. Formulary managers use tools like tiering, prior authorization, and step therapy to control spending while preserving access.
You can save money when a drug is on a preferred tier or when a generic is favored. Ask about coinsurance vs. copays—coinsurance can raise your costs for high‑price medicines even when a drug is technically covered.
Medicare Regulations
Medicare rules require Part D formularies to include drugs that treat all disease states and to offer at least two medications per category or class when applicable. Plans must follow CMS guidance on protected classes, meaning some categories (like antidepressants or antipsychotics) have stronger access protections.
These rules limit how plans can exclude entire drug classes or impose barriers. CMS also reviews formularies for transparency and consistency with benefit design.
You have the right to appeal coverage denials and request exceptions. The Modern Medicare Agency helps you understand these rules, explains specific plan formularies, and connects you with licensed agents you can speak to one‑on‑one.
Our agents match plans to your needs and aim to avoid extra fees that make coverage costly.
Comparing Medicare Formularies
You will learn how to check which drugs a plan covers and where to go for clear, reliable tools. Focus on formulary tiers, prior authorizations, and how our agents at The Modern Medicare Agency help you compare costs and coverage.
Evaluating Plan Options
Look at the plan’s formulary to see if your drugs appear and which tier each drug is in. Tiers usually affect cost: generics often sit in lower tiers, and brand-name or specialty drugs sit higher.
Check whether the plan requires prior authorization, step therapy, or quantity limits for any of your medicines. Compare total yearly cost, not just monthly premiums.
Add expected copays or coinsurance, deductible amounts, and any coverage gap details. If you use multiple pharmacies, confirm if the plan has preferred or network pharmacies that lower your cost.
The Modern Medicare Agency helps by matching your exact drug list to plan formularies. Our licensed agents talk with you 1 on 1, explain restrictions, and flag plans that raise out-of-pocket costs.
Tools and Resources
Use the Medicare Plan Finder and each plan’s online formulary PDF to search by drug name, strength, and frequency. These tools show tier placement, prior authorization rules, and step therapy at a glance.
Call the plan or your pharmacy to confirm real-time pricing. Pharmacy benefit managers can change tiers mid-year, so recheck before each enrollment period.
Keep a written list of drug names, doses, and how often you take them for quick comparisons. The Modern Medicare Agency offers free, personalized plan comparisons and walks you through online tools.
Our agents will verify coverage details with plans and pharmacies so you avoid surprise costs.
Tips for Managing Prescription Costs
Review your plan’s formulary before you fill a prescription. Check which tier your drug is on, and ask your doctor if a generic or a lower-tier alternative will work for you.
Switching can cut costs without changing your treatment. Use mail-order pharmacies for long-term meds when it makes sense.
They often offer 90-day supplies and lower copays, which saves time and money. Compare prices before you commit.
Ask about prior authorization or step therapy only if needed. These rules can affect access and timing, so know why your plan requires them.
Your provider and a licensed agent can help navigate paperwork. Look into discount programs and assistance if a drug isn’t covered.
Some programs reduce out-of-pocket costs during coverage gaps. Always verify eligibility before relying on them.
Keep a drug list and bring it to every healthcare visit. Include doses, strengths, and how often you take each medicine.
This helps avoid costly duplicates and keeps your care coordinated. Work with The Modern Medicare Agency for personalized plan selection.
Our licensed agents are real people you can speak to 1-on-1. They identify Medicare packages that fit your needs without hidden fees.
Talk to an agent before enrollment or during yearly plan reviews. Small changes in formularies or tiers happen each year.
A short call can prevent surprise costs and keep your medications affordable.
Conclusion
Choosing the right Medicare formulary affects your access to medicines and your out-of-pocket costs.
You should review plan drug lists each year and compare coverage for drugs you use now and might need later.
The Modern Medicare Agency helps you find plans that match your needs and budget.
Our licensed agents talk with you one on one to explain formularies, coverage rules, and any cost-sharing details.
You keep control: tell us your medications, preferred pharmacies, and budget.
We run comparisons and point out restrictions, step therapy, or prior authorization rules that could matter to you.
Working with The Modern Medicare Agency costs you nothing extra for personalized help.
You get clear options and practical advice so you can pick a plan that fits your health needs and finances.
