A formulary is a list. That is the whole idea. It says which medications a drug plan will pay toward, and how much of each one you carry yourself. Every Part D plan and every Medicare Advantage plan with drug coverage publishes one, they all change on January 1, and almost nobody reads theirs.
Which is fair, because they are between forty and four hundred pages long and they are laid out like a phone directory. But you do not need to read a formulary. You need to check six things in it, and that takes about fifteen minutes once you know where to look.
Before you start: write down what you actually take
Get the bottles. Not your memory of the bottles. For each one you want the exact name, the strength, and how often you take it. “Metformin” is not enough; “metformin ER 500mg, twice a day” is. Write down whether the label says the brand or the generic, because that changes the answer more than anything else on this page.
Add anything you take a few times a year: the inhaler you use in spring, the cream you get once. Those are the ones that produce a surprise bill in April.
1. Is each drug on the list at all?
Start here, because it is the only yes-or-no question. If a medication is not on the formulary, the plan pays nothing toward it, and you pay the pharmacy’s cash price.
A drug being absent is not always fatal. Plans must cover at least two drugs in most categories, and there is usually a close relative that is covered. But it is a conversation to have with your doctor in November, not a discovery to make at the counter in January.
2. Which tier is it in?
Most plans use five tiers. Tier 1 is preferred generics and often costs a few dollars. Tier 2 is other generics. Tier 3 is preferred brands. Tier 4 is non-preferred brands and can be a percentage rather than a flat amount. Tier 5 is specialty, which is always a percentage and is where the large numbers live.
This is where two plans with the same monthly premium diverge. The same medication can be tier 2 on one plan and tier 4 on another. That single difference is routinely worth more than the entire year’s premium, in either direction.
3. Are there letters next to it?
Formularies mark restrictions with small letters in a column nobody looks at. Four of them matter:
- PA, prior authorization. The plan will not pay until your doctor explains why you need it. Ordinary for expensive drugs, and an unpleasant surprise if you did not know.
- ST, step therapy. You must try a cheaper drug first and have it fail before the plan will cover this one. If you already tried and failed that drug years ago, your doctor can usually get the requirement waived, but somebody has to ask.
- QL, quantity limit. The plan will cover only so many per month. Check this if you take something more often than the label assumes.
- B/D. Whether it is billed under Part B or Part D depends on how it is administered. Mostly this is the plan’s problem, not yours, but it explains some odd bills.
4. Where do you actually fill prescriptions?
Nearly every plan has a preferred pharmacy network. The same drug, the same tier, the same plan will cost you less at a preferred pharmacy than at a standard one. The difference is often five to fifteen dollars a fill, which across a year and four prescriptions is real money.
Mail order is frequently cheaper again, particularly for a ninety-day supply of something you take every day. It is not always cheaper, and it is not right for everyone, but it is worth pricing.
Check that the pharmacy you like is preferred before you enroll, not after. Pharmacy networks change on January 1 as well.
5. What does the whole year cost, not January?
This is the step people skip, and it is the one that matters. Add up twelve months of premiums, plus the plan’s deductible if it has one, plus what each fill costs at your pharmacy, all the way through the year.
Since 2025 there is a ceiling on the last part. In 2026, once you have paid $2,100 out of your own pocket for covered drugs, you pay nothing more for covered drugs for the rest of the calendar year. That is catastrophic coverage, and it changed the arithmetic enormously for anyone on a specialty medication.
If January would be brutal
Ask your plan about the Medicare Prescription Payment Plan. It spreads what you owe across monthly bills instead of asking for it all at the counter. It does not reduce your total for the year. It does stop a $900 January. The plan will not offer it; you have to ask.
6. Do it again next fall
Formularies change every January. So do tiers, restrictions, preferred pharmacies and premiums. Your plan is required to tell you in an Annual Notice of Change that arrives by the end of September, and the part about your drugs is never on page one.
Between October 15 and December 7 you can move to any plan sold where you live, and the new one starts January 1. That is the window, and it is the only routine one. See every enrollment date.
The short version
Bring the bottles. Check that each drug is on the list, note its tier, look for PA, ST and QL, confirm your pharmacy is preferred, and total the year rather than the month. If any of that turns up something you do not like, there is almost always a better plan in your county, and finding it is free.
Or read us your list and we will do all six for you. That is most of what we do every fall.