Do Private Fee-for-Service Plans Have Drug Coverage?

Private Fee-for-Service (PFFS) plans are a type of Medicare Advantage (Part C) plan offered by private insurance companies. They provide an alternative way to receive Medicare benefits. PFFS plans must cover everything Original Medicare (Parts A and B) covers. Many individuals considering these plans often wonder about the inclusion of prescription drug coverage.

Understanding Private Fee-for-Service Plans and Drug Coverage

A Private Fee-for-Service (PFFS) plan allows beneficiaries to visit any Medicare-approved provider who accepts the plan’s terms and conditions of payment. Unlike some other Medicare Advantage plans, a PFFS plan does not require a primary care physician or referrals to see specialists, offering flexibility in choosing healthcare providers. Providers decide whether to accept the plan’s payment terms on a service-by-service basis, although some PFFS plans may have networks of providers who have agreed to always treat plan members.

PFFS plans can include integrated prescription drug coverage (MA-PD) or they may not. If a PFFS plan does not offer drug coverage, beneficiaries must enroll in a separate Medicare Part D Prescription Drug Plan (PDP) to obtain medication coverage. This distinguishes PFFS plans from some other Medicare Advantage plan types where a separate Part D plan is generally not permitted if the Medicare Advantage plan does not include drug coverage.

How Drug Coverage Operates Within PFFS Plans

When a PFFS plan includes integrated prescription drug coverage, this component functions similarly to a standalone Medicare Part D plan. The plan uses a formulary, a list of covered prescription drugs categorized into different tiers. Drugs in lower tiers, such as preferred generics, typically have lower out-of-pocket costs than those in higher tiers, which often include brand-name or specialty drugs. All Medicare drug plans must cover at least two drugs in most drug categories and all drugs in certain protected classes, such as HIV/AIDS treatments and antidepressants.

Beneficiaries will encounter various cost-sharing structures for prescription drugs, including deductibles, copayments, and coinsurance. For 2025, the standard Part D deductible is $590, though some plans may offer a lower or zero deductible. After meeting the deductible, individuals enter the initial coverage phase, paying a copayment or coinsurance, with the plan covering the rest. The coverage gap (“donut hole”) has been eliminated starting in 2025, and there is a $2,000 annual cap on out-of-pocket spending for covered drugs, after which beneficiaries pay nothing for the remainder of the year.

Integrated drug plans utilize pharmacy networks, which influence out-of-pocket costs. Plans may have preferred pharmacy networks where beneficiaries pay less for their prescriptions. Utilization management tools like prior authorization and step therapy may also be applied to certain medications. Prior authorization requires plan approval before covering a drug, while step therapy necessitates trying a less expensive alternative medication first. These measures help manage costs but can sometimes require additional steps to ensure coverage for needed medications.

Selecting a PFFS Plan with Prescription Drug Coverage

The official Medicare Plan Finder tool on Medicare.gov is a resource for identifying PFFS plans available in a specific area that incorporate prescription drug coverage. This tool allows for comparison of plans based on estimated out-of-pocket costs for specific medications and preferred pharmacies.

Enrollment in or switching between Medicare plans, including PFFS plans with drug coverage, occurs during specific periods. The Annual Enrollment Period (AEP), from October 15 to December 7 each year, is the primary time when individuals can join or change their Medicare health and prescription drug plans, with new coverage beginning on January 1. Evaluating the plan’s formulary is important to ensure all necessary prescriptions are covered and to understand their associated costs. Understanding the estimated total out-of-pocket costs for drugs, including premiums, deductibles, copayments, and coinsurance, is also important for budgeting.