What’s changing with Medicare prescription drug coverage in 2027

Patrice King Brown: Whether you’re new to Medicare, exploring your options, or just want to keep up with the latest in Medicare news, we’ve got you covered.

Stacy Smith: No fluff, no jargon. Just real conversations to help you navigate Medicare with confidence. I’m Stacy Smith.

Patrice King Brown: And I’m Patrice King Brown. Welcome to “Medicare for the Record,” brought to you by UPMC for Life.

Stacy Smith: Welcome back to “Medicare for the Record.” You know, Patrice, there are so many different parts and elements to Medicare that it can be confusing.

Patrice King Brown: Absolutely, Stacy. And drug coverage is one of the things that is most often utilized, and it's one of the most important parts of Medicare for many beneficiaries. But with changing rules and new cost protections and updates happening every year, it is indeed confusing. So in this episode, we will break down how Medicare prescription coverage works, and we'll discuss some of the upcoming changes for 2027, and we'll explain what you should do when choosing your drug coverage.

Stacy Smith: And we just happen to have with us Lauren Zandier. She's the director of clinical pharmacy at UPMC Health Plan. Lauren, your background is in pharmacy, right?

Lauren Zandier: Correct. I have been a pharmacist for over 20 years and have worked with Medicare plans for probably about 18 of those years.

Stacy Smith: And you've seen a lot of changes come through the 18 years of working with this.

Lauren Zandier: It's pretty incredible how many changes have happened since Part D started in 2006.

Patrice King Brown: So why are there so many changes to Part D?

Lauren Zandier: Recently, I think there have been a lot of changes because there's been so much focus at the federal level on lowering prescription drug costs. And so that's really led to a lot of changes in the Medicare benefits to try to lower out-of-pocket costs for prescription drugs for Medicare members—especially those people who are on really, really, really expensive prescription drugs.

Patrice King Brown: Yeah. What are some of the major changes to the program?

Lauren Zandier: One of the changes to look for is to this yearly out-of-pocket maximum on Part D. In 2027, the out-of-pocket maximum, which is really the maximum amount you would expect to pay for your Part D prescription drugs throughout the year of 2027, that number will be $2,400 in 2027. In 2026, it was $2,100, so it is a little bit of an increase to that. Some of the other changes that you should look out for are really changes to your individual drug plan. And so your premiums could change, the monthly costs that you pay for just to be in the plan. Drug copays and coinsurances could change. Formularies can change. So meaning that a drug that's covered in 2026 may no longer be covered in the same way in 2027. So just a lot of different things to look for.

Stacy Smith: Patrice and I are old enough to both be on Medicare. And when I signed up for Part D, there was a word I had never heard before, even being in the news, and that's “formulary.” What is that?

Lauren Zandier: Formulary really is just the list of drugs that the plan covers, but it does have more information than just the list. It tells you how each drug on the formulary is covered as well. So it's typically organized by tiers. So each drug on the formulary is associated with a different tier. And each tier is a number. So you might have a formulary that has five tiers. And each tier is numbered: 1, 2, 3, 4, 5. So if you look at the formulary, each drug will be associated with one of those tiers. And the tier is kind of your key to determining how much that drug is going to cost for you. So the tier will be associated typically with a copay or a coinsurance. So when you fill a prescription, you would expect to pay that copay or coinsurance. Formulary will also tell you if there are any limitations on that drug, like prior authorization requirements or limits to the quantity that you can fill. So just a lot of really good information when you look at that formulary.

Stacy Smith: Is it easy to find your drug in one of these formularies?

Lauren Zandier: It is typically pretty easy. So a lot of plans actually have a searchable formulary on their website, formulary documents that you can look through that are really organized usually by the condition that the drug treats. But also, like I said, you can usually just search the drug and find how it's covered.

Stacy Smith: What if your drug is not covered or listed in the formulary? And I should also make it a two-part question. Are the formularies different for different plans?

Lauren Zandier: Yeah. So formularies definitely differ plan by plan. And so it is an important thing to look at when you're trying to decide which plan to choose. So there can be a lot of differences in terms of how drugs are covered plan by plan.

Stacy Smith: Can the formulary be changed during the year?

Lauren Zandier: Typically, the formularies will not change in a negative way during the year. That's a rare occasion that that would happen. In some instances, if a new generic that's equivalent to a brand that's on the formulary comes out, that might get swapped out. You'll have to use the generic and not the brand. But during the benefit year, typically you're not going to see a lot of changes to the formulary. From one year to the next, that's a different story.

Stacy Smith: One more question I want to throw at you right here. And that is, are you obligated to use a generic drug?

Lauren Zandier: It depends on what's covered on the formulary. So if there is a generic available for a specific drug, usually a plan is going to prefer that you use the generic, but there are rare occasions where the brand could also be covered on the formulary. So best to just look at the formulary and see what's covered.

Patrice King Brown: We hear about generics and people tell us of course that that's usually less expensive, and there are always questions about are they as effective or not. And now also this new term that I hadn't heard much about, which is “biosimilars.” Can you explain what they are and what maybe the difference is?

Lauren Zandier: I think a lot of people are familiar with what a generic is. So generic drugs are typically a lower cost than their brand equivalent. Same approved by the FDA, same active ingredient as their brand name counterpart. A good example of a generic and a brand would be atorvastatin, which is the generic for Lipitor. It's used for cholesterol. And generics often represent a great way for patients to save on prescription drug costs. Generics are also typically able to be substituted at the pharmacy automatically for the brand-name drugs. If you came in with a prescription for Lipitor, the pharmacist would likely fill atorvastatin, the generic, for you. And really whether that generic is covered or not is dependent on the formulary. So make sure you check the formulary to see if the generic is covered. But generally generics are pretty well-covered across most formularies.

And when we're talking about biosimilars, they're very similar to generics, but there are some drugs on the market that are considered biologic drugs. Really the difference between a biologic drug and a regular brand-name drug is that a biologic drug has a much more complex structure. What that means is that it can never have a true generic, but it could have a biosimilar. And so an example of a drug that is a biologic drug that has biosimilars on the market is Humira. It's used for various different conditions, but rheumatoid arthritis is one of them. And a biosimilar is similar to a generic in that a biosimilar works in the same way as the original biologic product. And it does often represent a possibility for a patient using that biologic product to save some money by using the biosimilar.

Patrice King Brown: But that's not our choice? It's usually the choice of the pharmacist or your doctor?

Lauren Zandier: Well, it can be your choice actually in some instances. So again, always have to make sure that these drugs are covered on the formulary for the plan that you're in. But oftentimes there are biosimilars that are covered on the formulary. I would actually advise people to ask their pharmacist or their provider if they think there might be a biosimilar that's available for the drug they're taking or if they're just curious if there ever will be a biosimilar for that drug because the pharmacy is not always going to automatically substitute that biosimilar for the biologic drug. And that's probably a key difference for people to remember with biosimilars versus generics.

Stacy Smith: You know, there are a lot of commercials on television for different kinds of drugs—but one of the ones that has come into the play recently, of course, are weight loss drugs. Everybody's kind of interested in them if you have any weight problem whatsoever. So how does Medicare work with this?

Lauren Zandier: In general, Medicare Part D does not cover drugs if they're used solely for the purpose of weight loss. That's not changing in 2027. That's remaining the same. And so if you wanted to try to get a drug to use for weight loss primarily, your Medicare Advantage plan or your prescription plan is likely not going to cover that. However, in 2027—well, actually starting in July of 2026, running through the end of 2027—there is a new program. It's a Centers for Medicare and Medicaid Services program, so a CMS program, called Bridge. This program operates completely outside of that Part D benefit. It's not run by your Medicare Advantage plans, not run by your prescription plans. And this program actually does provide access for certain Medicare patients who meet eligibility criteria to specific GLP-1 medications for use in weight loss.

It's a little confusing because we know GLP-1 drugs can be used for other indications that are not weight loss, and so people get them for type 2 diabetes, fatty liver disease, obstructive sleep apnea. In those instances, the GLP-1 would still be covered through the Part D plan. But if someone is looking to potentially use weight loss drugs for weight loss, those drugs can be potentially obtained through this Bridge program. If you're interested in more information about the Bridge program, there is a lot of great information on the CMS website–so medicare.gov–information about who's eligible, how to use the program. And then it's always important for any prescription drug to talk to your doctor about that. I mean, obviously you'd need a prescription for the GLP-1, but also your doctor would have to agree that it's safe, that it's a good idea for you to be using a GLP-1.

But also, if you're interested in using Bridge, your doctor or your doctor's office is going to have to do a little work for you. They'll have to submit some information to really prove that you're eligible to get that drug through the Bridge program.

Patrice King Brown: So how important is it altogether in planning your drug network? I mean, how important is the choice in the pharmacy network for each of us?

Lauren Zandier: The pharmacy network can actually be more important than I think people realize. So the pharmacy network, just to explain what it is, it is really the list of pharmacies that you can use to fill your Part D prescription drugs. And those pharmacy networks, just like everything we talk about, can vary from plan to plan. You really want to look at that pharmacy network to make sure that the pharmacy you are using is in the network, especially if you really are attached to your pharmacist or really want to keep using that pharmacy. Because if it's not in the network, it's very likely you won't even be able to fill your Part D prescription drugs at that particular pharmacy. Pharmacy networks actually also can impact your cost. So there are some pharmacies within certain pharmacy networks—so a lot of plans will have this—that are designated as preferred pharmacies.

And those preferred pharmacies for certain drugs on the formulary may have lower copays or coinsurances for patients who go to those preferred pharmacies. So if you're not using a preferred pharmacy, you could be missing out on some cost savings. So again, kind of an area that I don't think people think about or talk about a lot, but pharmacy network is definitely important.

Stacy Smith: If you have to get a prescription filled at a pharmacy that is not in the network, can that be used as part of your deductible?

Lauren Zandier: Yeah. So if you get a prescription filled at a non-network or out-of-network pharmacy—well, first of all, they won't probably be able to run that through your insurance. You'll be paying cash. You could, at that point, submit some information to your plan to see if you can get reimbursed for that. If you do get reimbursed for that, that would count towards deductibles and all those different stages of coverage that you kind of run through throughout the year in Part D. If not, if you're just paying cash kind of on the side, it's not going to count towards all of that. The plan will have no idea you even filled that drug.

Patrice King Brown: So what do you do if, sometimes, you know, you've been taking a medication for a while, suddenly it is no longer available through your network at all. So what options does one have to still get the medicine that they may need?

Lauren Zandier: If your drug is no longer covered, it's probably a change to the formulary, probably something that happened from one year to the next. So I think we said if something's covered in 2026 doesn't necessarily mean it's going to be covered in 2027. So if that happens to you, there are options. The first thing I would probably do is talk to your doctor or the healthcare provider who prescribes that medication to you. There more than likely are alternatives on the formulary that may or may not be appropriate for you, but you won't know that unless you talk to your prescriber. And so they may be able to actually switch you to something else that is covered on the formulary or is a lower cost on the formulary. But if that is not an option for you, your doctor or you can contact your health plan or your Medicare Advantage plan and ask for an exception.

So there is a route for patients to get coverage for drugs that are not on the formulary. Your plan may be able to grant that exception. Your doctor will just have to submit some information. Then the other option, if you really are unhappy with that situation, you could look to join a different plan. So you can compare Medicare plans, see if there's another plan that covers that drug on their formulary.

Stacy Smith: Are you locked into a particular Part D plan once you sign up for it?

Lauren Zandier: Usually you are in that plan for the remainder of the year. There are sometimes special circumstances where you may be able to switch plans during the year. But again, you really shouldn't be seeing major formulary changes during that benefit year. And you'll be able to see what that formulary is going to look like in the upcoming benefit year during the Open Enrollment Period. So you can kind of check that out before you make a choice about which plan you want to be in, in the upcoming year.

Stacy Smith: Is choosing the formulary one of the more common mistakes? And what other mistakes can there be in choosing a Part D plan or part of a Medicare Advantage plan?

Lauren Zandier: I think it probably is, because there's just so much information to look at when you're trying to choose which plan you want to join. And so I have seen where people haven't actually looked to see if their drugs are going to be covered on the formulary of the plan that they're joining. That is, I would say, a common mistake. Another common misconception or mistake, too, is thinking that—again, just because a drug is covered on my plan this year, it's going to be the same coverage next year. And that's not always true.

Patrice King Brown: Yeah. So what do you do if you can't afford your medication?

Lauren Zandier: The first thing I would do actually is talk to my doctor or a pharmacist because there may be some changes that could be made to the medications you're taking to take something less expensive, like a generic or a biosimilar. And really there should be no shame in having that conversation because prescription drugs are really expensive. I think we all know that. Many of them are very expensive. And there are a lot of people who do struggle to pay for their prescription drugs, or the prescription drug costs just become a burden and so they want to maybe make a change to try to help that situation. That's not something that a patient should try to handle on their own. But there are also some different programs out there that patients can look into if they're having trouble affording prescriptions.

So one is a federal program called Extra Help. And this program can help to pay for premiums, those copays and coinsurances and deductibles. To be eligible for the program, you have to live in one of the 50 states or District of Columbia, also meet some income requirements, resource requirements. Extra Help is kind of interesting, too, because I think there are a lot of people out there who would probably qualify for help through Extra Help, but just don't even realize that they would. So, definitely something to look into.

In Pennsylvania, there are two programs, PACE and PACENet, that also can help with prescription drug costs. They're really for older adults, so 65 or older, and also require some income limits and things like that. Also if you've served in the military, Veterans Affairs (the Department of Veterans Affairs or the VA) is offering a lot of different services and something definitely to look into there as well.

Stacy Smith: So it's that time of the year when people start to prepare to decide which plan they're going to use. What advice would you give people at this point?

Lauren Zandier: I would give people the advice to probably start with making sure you have a really accurate, complete list of all the medications that you take, including the name, the dosage, how often you take those drugs. I would also recommend listing out the prescriber of those drugs, so which doctor is prescribing that for you. It may even be helpful to list out the pharmacy that you're filling each prescription at. That's important, regardless, for anyone who's taking prescription drugs—but I do think it also will help you to evaluate different health care options, so different plans. So looking to see, are these drugs actually covered on the formulary and the plan that I'm looking to join?

The other advice I would give is, don't hesitate to ask questions because all of this is very complicated. And I'm talking questions about how your health insurance works, questions about how your drugs work, questions about treatments you're undergoing.

I just feel really, really strongly that in order to make really confident choices about your health and your healthcare coverage, you really need to understand those different elements of healthcare. And it's a hard system to navigate.

The other thing I would say is if you have questions about the specific plan that you're in, don't hesitate to pick up the phone and call your plan to ask those questions.

Stacy Smith: Lauren, thank you so much. You've given us so much information here today to digest and I think it's really pertinent and it's very helpful. So thank you, Lauren Zandier.

Patrice King Brown: A few things to take away from our conversation today:

Plan formularies and networks can change each year. Upcoming changes will be noted in the annual notice of change, which members should have received by October 1st. And if you are struggling with the cost of your medications, see if you qualify for Extra Help, which may help lower your out-of-pocket costs.

Stacy Smith: And always check to make sure that your prescriptions are still covered in your plan's formulary and that your preferred pharmacy is still included in your plan’s network. And for more information, you can visit medicare.gov, cms.gov, or the UPMC for Life website, upmchealthplan.com/medicare.

Patrice King Brown: Lauren, we want to thank you for joining us and thank you for watching.

Thanks for tuning in to “Medicare for the Record,” brought to you by UPMC for Life. To learn more about your Medicare options, visit upmchealthplan.com/fortherecord.

This podcast is provided for general informational and educational purposes only. It is not medical care or advice. For questions regarding medical care, please consult with your healthcare provider. Views and opinions expressed by the participants are solely their own and do not necessarily reflect those of UPMC Health Plan, its subsidiaries, parents, or affiliates.