You may have heard the term “tier” associated with your medications. Perhaps you were told that a drug had “changed tier levels.” We will explain how insurance companies categorize covered medications and why it is important to be aware of the tier your medications fall into.
How Do Drug Tiers Work?
Medicare plans with prescription drug coverage organize medications into different price categories called “tiers.” Medicare plans can have as many as 4 or 5 tiers and, generally, drugs in the lower tiers have lower costs while drugs in higher tiers have higher costs. For example, a tier 1 drug will usually have lower copays than a tier 3 drug. But it is important to note that this is not always the case—it is up to the individual insurance company to determine the benefits of a given tier level. For this reason, we always advise our clients to be aware of what tier their medications fall into and what the copay or coinsurance will be for that tier level.
Why Your Part D Deductible Matters
It is important to know if your plan includes a Part D deductible. If a deductible is included it is important to know what tiers are affected by the deductible. Your plan will list which tiers are affected by the deductible in your Evidence of Coverage. Some plans have a deductible as high as $405 in 2018, with others as low as $0. The deductible amount must be approved by the Centers for Medicare and Medicaid Services (CMS).
If your plan has a deductible, the deductible needs to be satisfied before the insurance company will pay anything toward those medications. Once the deductible is met, you will begin paying the copays or coinsurances that are associated with the tier level of your medication. On some plans, the deductible only applies to specific drug tier levels as opposed to all tiers. We are happy to assist you if you need clarification on how your plan’s deductible works.
Questions? We’re Here to Help!
Please contact our Client Services Team at 1-877-222-1942 or firstname.lastname@example.org if you have any questions about deductibles or the tier levels of your medications.