What Are the 5 Different Tiers on Medicare Part D?

Since Original Medicare (Parts A and B) doesn’t cover most prescription drugs taken at home, many Medicare beneficiaries choose to sign up for Medicare Part D — or prescription drug coverage — through private insurance companies. 

Prescription drug coverage is generally received through individual plans or as part of a Medicare Advantage plan. While Medicare dictates some medications that must be covered by all Part D plans, other drug coverage varies widely from plan to plan. The list of a plan’s covered medications is known as a “formulary”, and many plans place these covered drugs into different levels, or “tiers”, on their formularies.

Prescription medications in each tier have a different cost. Knowing what tier your drug is in can help you predict how much it will cost you. Drugs in lower tiers generally cost less than drugs in higher tiers. Here’s what each Medicare Part D tier means:  

Medicare Part D Tiers

1. 1. Preferred Generic. Generic drugs with the lowest copayment. 
   2. Generic. Generic drugs with a higher copayment than Tier 1. 
   3. Preferred Brand. Brand-name prescription drugs with a higher copayment than Tier 2. 
   4. Non-Preferred Brand. Brand-name prescription drugs with a higher copayment than Tier 3.
   5. Specialty. The highest cost drugs. They are generally used to treat complex conditions. 

For help deciding what Medicare Part D plan is right for you or questions about what tier your medications are in, feel free to contact us. Remember, Medicare Part D plans can change at any time, so it’s important to review your plan annually!