Key Takeaways

  • Some medications cost more under Medicare Part D due to formulary tiers, cost-sharing structures, and coverage gaps. Understanding how these factors work helps you avoid unexpected expenses.

  • You can minimize costs by comparing plans, using preferred pharmacies, considering generic alternatives, and leveraging assistance programs designed for USPS retirees and employees.

Why Are Some Medications More Expensive Under Medicare Part D?

If you’ve ever been shocked by the price of a medication under your Medicare Part D plan, you’re not alone. Many USPS retirees and employees transitioning to Medicare face unexpected costs at the pharmacy. Understanding why some medications cost more can help you make smarter decisions and keep more money in your pocket.

1. Your Medication’s Formulary Tier Matters

Medicare Part D plans categorize drugs into different formulary tiers, which affect how much you pay out of pocket:

  • Tier 1: Preferred generics (lowest cost)

  • Tier 2: Non-preferred generics

  • Tier 3: Preferred brand-name drugs

  • Tier 4: Non-preferred brand-name drugs

  • Tier 5: Specialty drugs (highest cost)

A drug placed in a higher tier means you’ll pay more for it. The exact cost varies by plan, but the general rule is that generics cost the least while specialty drugs cost the most. Additionally, some plans shift medications between tiers annually, meaning a drug that was affordable last year may cost more now.

2. Preferred vs. Non-Preferred Pharmacies

Not all pharmacies charge the same price for the same drug. Medicare Part D plans have preferred pharmacy networks where you’ll pay less for medications. If you use an out-of-network or non-preferred pharmacy, you could end up paying significantly more. Checking your plan’s pharmacy list can prevent surprise costs.

Some USPS retirees may find that certain retail pharmacy chains no longer participate in their plan’s preferred network, making it necessary to switch pharmacies to continue receiving discounted rates. Always verify your pharmacy status before filling prescriptions.

3. The Coverage Gap Still Affects Costs

As of 2025, Medicare Part D no longer has the ‘donut hole’ coverage gap in the traditional sense, but out-of-pocket costs can still be a concern. Once your total drug spending reaches a certain limit, your cost-sharing may increase before catastrophic coverage kicks in. Fortunately, there’s now a $2,000 annual cap on out-of-pocket prescription costs, offering some financial relief. However, reaching this threshold early in the year could still mean higher monthly expenses until the cap resets the following January.

4. Brand-Name vs. Generic Medications

Brand-name drugs tend to be more expensive than their generic counterparts. If your doctor prescribes a brand-name drug, ask if a generic or lower-tier alternative is available. Some Part D plans may cover only the generic version unless there’s a medical reason for needing the brand-name option.

Beyond generics, you might also consider therapeutic alternatives—different medications that treat the same condition but come at a lower cost. Some Part D plans offer cost-sharing incentives for choosing these alternatives, leading to potential savings.

5. Specialty Medications and Prior Authorization

Some high-cost medications require prior authorization before your plan will cover them. This means your doctor must confirm with the plan that the drug is medically necessary. Without prior authorization, you may be denied coverage or have to pay full price. USPS retirees who require specialty medications should check if their prescriptions need additional approvals and ensure they have the necessary paperwork submitted in advance.

How to Lower Your Medication Costs

Even with Medicare Part D, there are several strategies you can use to reduce prescription drug costs. As a USPS retiree or employee transitioning to Medicare, these steps can make a big difference in your healthcare expenses.

1. Review Your Plan Every Year

Medicare Part D plans change annually, including their formularies, preferred pharmacies, and cost-sharing structures. What was affordable last year may be more expensive now. Reviewing your options during the Medicare Open Enrollment Period (October to December) ensures you have the most cost-effective plan.

2. Use Mail-Order Pharmacies

Many Part D plans offer discounts for using mail-order pharmacies. If you take maintenance medications for chronic conditions, filling prescriptions through mail-order can save both time and money. Some plans even provide a 90-day supply option for a single copayment, making it an even more budget-friendly choice.

3. Look Into Extra Help and Assistance Programs

USPS retirees and lower-income Medicare beneficiaries may qualify for Extra Help, a federal program that reduces drug costs. Additionally, many pharmaceutical companies offer assistance programs for specific medications.

State-based programs may also provide support for those who do not qualify for Extra Help but still need financial assistance with prescription drug costs. Checking eligibility requirements can lead to additional savings.

4. Compare Pharmacies for the Best Price

Even within a plan’s network, different pharmacies may charge different prices. Some retail pharmacies offer savings programs that can reduce costs even further. It’s always worth comparing prices before filling a prescription.

Some USPS retirees and employees opt to use independent or smaller chain pharmacies, which sometimes offer better deals than national chains. Always ask about lower-cost options before purchasing.

5. Ask About Alternative Medications

If your medication is in a high-cost tier, ask your doctor about alternatives that may be covered at a lower tier. Switching to a different but equally effective drug could lead to significant savings.

6. Use Manufacturer Coupons and Discount Programs

Many drug manufacturers offer coupons, rebates, or discount programs for their brand-name medications. While Medicare does not allow the use of these discounts with Part D-covered drugs, you may still use them if you decide to pay out-of-pocket rather than using your insurance.

Timing Matters: When to Make Changes to Your Plan

To avoid overpaying for medications, keep these important timeframes in mind:

  • Medicare Open Enrollment (October–December): The best time to compare and switch plans.

  • Special Enrollment Periods (SEPs): Available if you experience qualifying life events like retirement or losing employer-sponsored coverage.

  • Mid-Year Plan Reviews: Some plans allow limited mid-year changes based on cost increases or formulary adjustments.

Staying proactive about your coverage ensures you’re always in the best plan for your medication needs. USPS retirees transitioning to Medicare should pay extra attention to their first year of coverage to avoid unexpected expenses.

Final Thoughts on Managing Your Medicare Part D Costs

Understanding why some medications cost more under Medicare Part D gives you the power to make informed choices. By reviewing your plan, using cost-saving strategies, and keeping an eye on annual changes, you can ensure that you’re not paying more than necessary for prescriptions. If you need professional advice tailored to your situation, get in touch with a licensed agent on this website.