- Tiers refer to the levels of cost-sharing that apply to medications. PDPs, including those offered by private insurance companies and Medicare Part D, divide medications into different tiers, with each tier having a different level of cost-sharing.
- The number of tiers and the specific medications that are included in each tier can vary depending on the plan. In general, the higher the tier, the higher the cost-sharing for the medications in that tier.
- The most common tiers are:
- Tier 1: Generic medications. These are medications that have the same active ingredients as a brand-name medication, but they are generally less expensive.
- Tier 2: Preferred brand-name medications. These are brand-name medications that have been approved by the
plan and that have been found to be safe and effective.
- Tier 3: Nonpreferred brand-name medications. These are brand-name medications that are not on the preferred list and that may not have been found to be as safe and effective as medications on the preferred list.
- Tier 4: Specialty medications. These are medications that are used to treat complex or rare conditions and that may be very expensive.
- The cost-sharing for each tier can vary depending on the plan. Some plans may have a copayment (a fixed amount that the individual pays each time they fill a prescription) for each tier, while others may have a coinsurance (a percentage of the cost of the medication that the individual pays).
- It is important for individuals to understand the tiers and the cost-sharing for their PDP, as this can help them make informed decisions about their medications. If beneficiaries have questions about the tiers and cost-sharing for their plan, they should contact their plan or visit their website for more information.
