What are “tiers or categories” on a Medicare drug plan’s drug list (formulary)?

Many Medicare drug plans place drugs into different “tiers.” Drugs in each tier have a different cost. Some plans may have more tiers and some may have fewer. Here is an example:

Tier 1
You pay: Lowest copay
What is covered: Most generic prescription drugs
Cost example*: $5.00

---

Tier 2
You pay: Medium copay
What is covered: Preferred brand-name prescription
Cost example*: $28.00

---

Tier 3
You pay: Higher copay
What is covered: Non-preferred brand-name prescription
Cost example*: $53.00

---

Speciality Tier
You pay: Higher pecentage
What is covered: Unique, very high-cost drugs
Cost example*: 25% - 33% of drug cost

---

* Note: These amounts aren’t actual costs. They are examples of copayments or coinsurance costs for a 30-day supply. Costs vary by plan and by drug.