When reviewing Medicare plans, many people focus on monthly costs and provider networks. Prescription drug coverage, however, often has the greatest impact on long term affordability. A plan that looks attractive on paper can quickly become expensive if it does not align well with your medication needs.

The first factor to understand is the plan formulary, which is the list of covered medications. Every Medicare Part D plan and Medicare Advantage plan with drug coverage has its own formulary. Drugs are grouped into tiers, and each tier has a different cost. Generic medications typically cost less, while brand name and specialty drugs can be significantly more expensive. If one of your regular prescriptions is not on the formulary or is placed in a higher tier, your out of pocket costs may be much higher than expected.

Another key issue is pharmacy networks. Many plans offer lower copays when you use preferred pharmacies and higher costs if you go outside that network. If your current pharmacy is not preferred, you may need to switch pharmacies or accept higher costs. For people who value convenience or rely on a local pharmacy they trust, this detail can strongly influence plan satisfaction.

Coverage phases also play a major role in prescription drug costs. Medicare drug plans have multiple stages, including the deductible phase, initial coverage, and catastrophic coverage. Costs can fluctuate throughout the year as you move through these phases. Some beneficiaries are surprised when their copays increase midyear, even though they have not changed plans or medications.

Medication needs can also change over time. A plan that works well this year may not be the best option next year if a new prescription is added or a drug moves to a different tier. This is why annual plan reviews are so important. Even small formulary changes can have a meaningful financial impact.

For individuals managing chronic conditions, specialty drugs deserve special attention. These medications often require higher coinsurance rather than flat copays, which can lead to unpredictable and substantial expenses. Understanding how a plan handles specialty drugs is critical before enrolling.

Prescription drugs are not just a side plan of Medicare coverage.  They are often the deciding factor between a plan that supports your health and budget and one that creates ongoing financial stress. Taking the time to review formularies, pharmacy networks, and coverage rules can help ensure your Medicare plan truly fits your needs, both now and in the future.

Need help with this? Contact one of our licensed insurance agents. It’s always free to seek guidance with your Medicare plan to ensure that you understand its coverage, drug formulary, and more.