When people begin using their Medicare prescription drug plan benefits, they don't realize the importance of their drug tier. They often don't realize there are different tiers of medications nor do they understand why there are different tiers of medication. The staggering differences between these levels mean a lot to those that have to pay for it.
What is a drug tier?
Thousands of medications are covered by a Medicare prescription drug plan. These medications are all very different when it comes how much they cost when they are made. The classification system they are sorted into helps people understand the difference in those manufacturing costs.
As medications are sorted, they are placed into like categories. Medications that share certain criteria and manufacturing costs are placed into one tier. Most insurance companies have 4 tiers of medications. Each tier is different from the others but share one thing in common; all medications that are on these tiers are Medicare approved medications.
Tier One Medications
Tier one medications are medications that are the most common generic medications. These medications have been on the market for some time and can be made by many different drug manufacturers. Because these are medications that can be made by different companies, they are often cheaper to make.
When a medication isn't expensive to make, the copays for these medications are relatively low. The costs of tier one medications are sometimes lower than the contracted copay of these medications. This is the most desired tier for medications because of their costs.
Tier Two Medications
Tier two drug medications are some of the most commonly prescribed medications on a formulary. The medications on this tier are also known as the preferred brand name medications. These medications are mainly made up of brand named medications. Although they are brand named medications, they have been on the market for quite some time but a generic form hasn’t been released yet.
These medications are still normally only made by one manufacture but they aren't as expensive to make as they were when their first were introduced to the market. With the lowered cost of making medications, the copay for tier two medications are a little more expensive than a generic. These copays are well within reason because of the cost to make them. Because of the copay for these medications, most beneficiaries want a tier two medication if it's not generic.
Tier Three Medications
The medications on tier three are the non-preferred brand named medications. These medications are normally the brand named medications newly released to the market. These medications are medications that aren't always commonly prescribed to treat illnesses. Because they aren't always prescribed, they aren't as easy to be made nor are they inexpensive to make.
When a person is prescribed a tier three medication, they find the costs of those medications are more than generic or even brand named medications. With these medications being new to the market or not being used as commonly as before, the cost to make them is a lot higher than most people expect. When a person is prescribed a tier three medication, they are charged more money than they were charged for the previous two tiers.
Tier Four Medications
The medications that are in tier four are medications that are considered specialty medications. These medications are only prescribed for certain illnesses that are very grave such as some cancer, severe cases of rheumatoid arthritis and many other illnesses. These are medications that aren't always prescribed because they are such specialized medications.
With the medications being so highly specialized, these medications are very expensive. Most Medicare part D insurance providers don't charge a copay for these particular medications. These prescription drug plans normally charge a co-insurance or a percentage of the negotiated price to be paid at the pharmacy by the patient. This is something that can be devastating for those that aren't expecting this news nor have the resources to pay for it.
As Medicare part D beneficiaries begin to look at their medications and what tiers they fall under, they begin to realize the true cost of having a Medicare part D plan. Although many people think their medications will fall into tier three and tier four classifications, most are surprised they don't. Those that find themselves being prescribed more expensive medications will go through the different stages of their part D prescription drug plan very quickly.
There are many parts to the machine called Medicare part D. These different parts may look as if they don't mean a lot but many times they are a major piece of the puzzle. As people begin to think about changing their Medicare part D plans, they should also look at where their medications fall within their new plan's formulary and tier.