Just when you thought Medicare couldn’t get any more confusing, you learn about the Part D formulary. So, what exactly is a formulary and why is it so important?
Each Medicare Prescription Drug Plan has a list of drugs that it covers. This list is called a formulary.
Within your plan’s formulary, prescription drugs are categorized by tiers. Drugs placed in a lower tier tend to be less costly, while drugs placed in higher tiers are more expensive.
Expert Tip: If your doctor prescribes a brand-name drug to you, ask if a generic version is available. It could end up saving you money!
Understanding the basics of your plan’s formulary is important because this list can have a significant impact on the amount you pay for your prescriptions. And many people do not realize that insurance companies change the formulary on an annual basis.
Insurance companies sometimes move drugs on their plan formularies into different tiers from year to year. They also sometimes take drugs off the formulary altogether. This means that if your drugs change tiers, the cost you pay this year for your drugs could be very different next year. What’s more, if any of your drugs are removed from the formulary, you could be required to pay 100 percent of the cost of the drug completely out of pocket. This adds up!
Insurance companies typically make changes to their plans’ formularies before Medicare’s open enrollment period, also referred to as the Annual Enrollment Period or AEP. This time frame occurs each year between Oct. 15 and Dec. 7. These changes will take effect on Jan. 1 of the upcoming year.
The government requires that insurance companies notify enrollees about changes by sending out a document called the Annual Notice of Change (ANOC) no later than Sept. 30. This document explains all the changes to your plan’s benefits, costs, and formulary.
When you receive this document, it is very important that you review it carefully to ensure that you know what changes are being made to your coverage. Based on this information, you can decide if your plan will still meet your health needs and budget in the coming year or if you need to begin looking at different options.
Our goal is to keep you informed and to provide you with the knowledge and confidence you need to make the most important decisions affecting your health plan coverage.
Health care seems to be changing every day, but you don’t have to go it alone. Let our compassionate experts make finding the right health plan for you easy!
Contact us at 937.915.3563 to get started with Medicare.
If you’re currently a RetireMed client and have questions about your Medicare plan, call 877.222.1942 to speak with a client advisor.
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