What Kind of Drug Coverage Does Medicare Have?


Quick Answer

The drug coverage that Medicare provides varies by plan. Each Medicare Prescription Drug Plan has its own list of covered drugs, called a formulary. All drugs covered come from a Formulary Reference File that the Center for Medicare and Medicaid Services publishes. Medicare offers prescription-drug coverage to everyone with Medicare.

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Full Answer

Medicare provides prescription-drug coverage to those who are members of an insurance plan approved by Medicare. Medicare offers two ways to get prescription-drug coverage. One way is to add Part D, which is the Medicare Prescription Drug Plan. Another way to get drug coverage is to get a Medicare Advantage Plan, also known as Part C, that offers Medicare prescription-drug coverage. The Formulary Reference File that the Center for Medicare and Medicaid Services publishes is a listing of drug products that can be included in a plan's formulary. The plan submits the list to be included in the specific formulary to the Center for Medicare and Medicaid Services for review and approval. Although basic categories are similar for all plans, it is important to check which drugs a specific plan covers.

Drugs are placed in different tiers in the plan formulary. Higher tiers generally have higher costs. Prescriptions for certain drugs need prior authorization by the drug plan. The covered individual may need to prove that a drug is medically necessary. Anyone on Medicare who does not choose a prescription drug plan when first eligible is likely to have to pay a late-enrollment fee to join at a later date.

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