Medicare Part D Formularies: How Generic Coverage Works in 2025

By 2025, Medicare Part D is covering more than 90% of all prescriptions with generic drugs - and that number keeps climbing. If you’re on Medicare and take any regular medications, understanding how generic coverage works isn’t just helpful - it’s essential to saving money and avoiding surprises at the pharmacy counter.

What Is a Medicare Part D Formulary?

A formulary is simply a list of drugs your Medicare Part D plan covers. Every plan has one, and it’s not the same across the board. But here’s the key: every plan must cover at least two different generic versions of each type of medication - like blood pressure pills, antidepressants, or diabetes drugs. This isn’t optional. It’s required by federal law.

These lists are organized into five tiers. The lower the tier, the less you pay. Generics almost always land in Tier 1 or Tier 2. Tier 1 is for preferred generics - the cheapest options your plan encourages you to use. Tier 2 is for non-preferred generics, which cost a bit more but are still far cheaper than brand names.

For example, if you take a generic version of lisinopril (a common blood pressure drug), your plan might charge you $5 for a 30-day supply on Tier 1. If you pick a different generic that’s not preferred, you might pay $15 or even 25% of the drug’s cost. That’s why checking your plan’s formulary before you enroll matters - a lot.

How Much Do Generics Cost Under Part D in 2025?

In 2025, the standard deductible for Medicare Part D is $615. That’s the amount you pay out of pocket before your plan starts helping. But here’s the good news: many plans - over half of them - have a $0 deductible for generics. That means if you’re only taking generic drugs, you might start getting coverage right away.

Once you pass the deductible, you pay 25% coinsurance for generics during the initial coverage phase. That’s the same percentage you pay for brand-name drugs, but here’s the catch: the actual dollar amount you pay is much lower because generics cost far less. For example, a $10 generic might cost you $2.50. A $100 brand-name drug? That’s $25.

But the biggest change in 2025 is the out-of-pocket cap. You now pay no more than $2,000 a year for all your drugs - including generics. Once you hit that limit, you enter catastrophic coverage. And in catastrophic coverage, you pay $0 for every generic prescription for the rest of the year. No copays. No coinsurance. Nothing.

This change alone saves most people on multiple generics hundreds of dollars a year. For someone taking three or four daily generics, that could mean $300-$500 saved annually.

Why Are Generics So Cheap in Part D?

It’s not magic. It’s math - and policy.

Generic drugs are chemically identical to brand-name drugs but cost 80-90% less because they don’t require expensive clinical trials. The manufacturers don’t need to recoup billions in R&D costs. That’s why, in 2023, generics made up 92% of all prescriptions filled under Part D - but only 18% of total drug spending.

Part D plans use this to their advantage - and yours. They put generics on the lowest tiers because they know people will choose them. And because they’re cheaper, the plan pays less, you pay less, and Medicare saves billions. In fact, the tiered system saves beneficiaries an estimated $1,200 per year compared to plans without tiers.

Even better, when you buy generics, only the amount you actually pay counts toward your $2,000 out-of-pocket cap. For brand-name drugs, a portion of the manufacturer’s discount also counts. That means generics help you hit the cap faster.

What If Your Generic Isn’t Covered?

This happens more than you think. You might be taking a generic version of a drug your plan doesn’t list - even if it’s the same chemical. Why? Because plans often cover one generic in a class but not another. For example, your plan might cover amlodipine besylate but not amlodipine besylate with a different manufacturer. To them, they’re the same. To you, they’re not - especially if one causes side effects.

That’s where a “coverage determination” comes in. If your doctor says you need a specific generic, you can ask your plan to cover it. You don’t need to appeal right away. Just fill out a simple request form. In 2023, 83% of these requests were approved.

Also, don’t assume your pharmacist’s substitution is automatic. If your plan covers Generic A, but the pharmacist gives you Generic B because it’s cheaper, you might get stuck with a higher copay - or even a full-price bill - if Generic B isn’t on your formulary. Always ask: “Is this the exact generic my plan covers?”

How to Find the Best Plan for Your Generics

Not all Part D plans are created equal. Two plans might both cover your generic blood pressure drug - but one puts it on Tier 1 with a $0 copay, and the other puts it on Tier 2 with a $20 copay. That’s a $240 difference per year.

Use the Medicare Plan Finder tool. Type in every medication you take - including dosage and frequency. Filter for “preferred generics.” Look at the total annual cost: deductible + copays + coinsurance. Don’t just look at the monthly premium. A $10/month plan with $100 in monthly generic copays isn’t better than a $30/month plan with $20 in copays.

Also, check the Annual Notice of Change (ANOC). Every fall, plans send this letter. It tells you if your drug’s tier is changing, if it’s being removed, or if the price is going up. If your plan drops your generic, you can switch plans during the Annual Enrollment Period (October 15-December 7) without penalty.

Pro tip: If you take three or more generics, look for a plan with a $0 deductible. Over 50% of stand-alone Part D plans offer this in 2025. That means your first prescription is covered immediately - no waiting.

What’s Changing in 2026 and Beyond?

The rules keep evolving. In 2026, the out-of-pocket cap rises to $2,100 - still a huge win. But bigger changes are coming.

Starting in 2029, Medicare will start negotiating prices for some generic drugs - yes, generics. The first one? Insulin glargine (the generic version of Lantus). That could bring prices down even further.

Also, by 2026, every Part D plan must include a “generic price comparison tool” in its member portal. That means you’ll be able to see, right on your phone, which generic version of your drug costs the least - even if it’s from a different manufacturer.

And if Congress passes new legislation, plans may soon be required to cover every generic in a class if they cover any one of them. That would end the “one generic only” problem that’s frustrated so many beneficiaries.

Real Stories, Real Savings

One beneficiary in Ohio, 72, takes three generics: metformin, lisinopril, and atorvastatin. In 2024, she paid $80 a month out of pocket. In 2025, her plan moved all three to Tier 1 with $0 copays. She pays nothing now. That’s $960 saved in a year.

Another man in Florida, 68, was paying $45 a month for a generic heart medication - until he switched plans. His new plan covered the same drug with a $5 copay. He also found a cheaper alternative generic he didn’t know existed. He now pays $2 a month. His total drug costs dropped from $540 to $240 a year.

On the flip side, a woman in Texas was charged full price for a generic because her plan only covered one version - and the pharmacist gave her another. She had to file a coverage request. It took three weeks. She got approved - but she lost $120 in the meantime.

These aren’t rare cases. They’re everyday realities for millions.

What You Should Do Now

1. Make a list of every drug you take - brand and generic - including dose and frequency.

2. Go to Medicare.gov/PlanFinder. Enter your drugs. Sort by “lowest total cost.”

3. Check if your generics are on Tier 1. If not, see if there’s a plan that puts them there.

4. Look for a plan with a $0 deductible if you take three or more generics.

5. Don’t wait for fall. If your drug’s price jumped unexpectedly, you can switch plans mid-year if you qualify for a Special Enrollment Period.

6. Always ask your pharmacist: “Is this the generic my plan covers?”

7. If you’re denied coverage for a generic your doctor prescribed, file a coverage determination. You have a very high chance of winning.

Medicare Part D wasn’t designed to be simple. But for people taking generics, it’s one of the most effective cost-saving programs in American health care. The system works - if you know how to use it.