Your Formulary: Knowing What's Covered

Posted on February 12, 2024 By Jeff Snyder

When you enroll in a Medicare Part D plan, you may hear the term “formulary” bandied about. If you’re new to the Medicare program, you may not know what this is. A formulary is another name for the list of prescription drugs that are covered by your plan. Understanding your formulary is important for making sure you get coverage that fits your needs at a price you can afford.

Formulary 101

Not only does a formulary say what drugs are covered, it also determines how much they will cost you. Most of the time, you’ll find that the lists of prescription drugs will be split up into tiered formularies. Drugs have different costs depending on the tier they fall into; the higher the tier, the more it will cost you.

When it comes to formularies, another important term to know is an exception. You can submit a Medicare insurance formulary exception letter if you or your physician (or drug prescriber) take issue with a specific portion of your drug coverage. There are two types of exceptions: formulary exception and tiering exception. A formulary exception is when you or your doctor think a drug that isn’t on your formulary should be covered. You can also use this exception to request your plan waive a coverage rule. A tiering exception is when you request your plan charge a lower amount for a higher-tiered medication.

Each plan is required to publish its formulary online. Before enrolling in a Medicare Part D plan, this is one of the first places you’ll want to look.

Can a Formulary Change?

Your drug plan’s formulary can be changed at any time. However, plans are required to give written notice of any changes at least 60 days before they become effective.

Additionally, when you request a refill, you’ll be provided a written notice of a change and a 60-day supply of the drug under the previous stipulations of the plan. But there is one exception to this rule. If the Food and Drug Administration (FDA) removes a drug from the market for a safety reason, your plan is not required to inform you until after the drug is off the formulary.

How is a Formulary Decided?

Formularies are written and reviewed by a panel of experts known as a Pharmacy and Therapeutics (P&T) Committee. The P&T Committee is made up of doctors, pharmacists, and medical professionals who are independent of your plan. This committee will create and maintain the list of drugs your plan covers for appropriateness. The P&T Committee also reviews requested exceptions you or your doctor may make.

Your formulary is one of the most important factors, besides cost, when it comes to choosing a Medicare Part D plan. After all, you’ll want to know what medications your drug plan will actually cover and at what price. In many senses, the formulary defines the quality of coverage you’ll receive. If you’re not sure what’s in your formulary or are unhappy with it, it may be worth reviewing your plan.

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