The short answer
A preferred pharmacy is one that agreed to charge you less than other pharmacies in your plan's network. Using one may lower your copayment or coinsurance. Not every plan has preferred pharmacies, and no government page states how much the saving is.
You can fill a prescription anywhere you like. Your plan will still decide what it pays, and in some plans it decides to pay nothing at all unless the pharmacy is one of theirs.
What is a preferred pharmacy?
A preferred in-network pharmacy is one that has agreed to charge you less than the other pharmacies inside your plan's own network. Medicare's wording is that it may save you money on your out-of-pocket drug costs, meaning your copayment or your coinsurance, rather than your monthly premium.
That sits inside a wider arrangement. Medicare plans have contracts with in-network pharmacies, which agreed to offer a discounted price for members of certain plans. In some plans, your drugs are only covered if you fill them in network.
So there are two separate questions at the counter, and people usually merge them. The first is whether the pharmacy is in your network at all, which decides whether you are covered. The second is whether it is a preferred one, which decides how much of the bill is yours.
Note the conditional in the rule. Preferred pharmacies exist if your plan has them. Not every plan builds that second layer, and a plan with no preferred tier is not a worse plan. It is a plan with one fewer distinction to check.
How much can I save?
Nobody publishes that number. Medicare says a preferred pharmacy may save you money because it agreed to charge less than others in the network, and it stops there. There is no percentage, no range and no example anywhere on the government's pages.
The rules are published and the prices are not. This is our reading rather than a rule Medicare states, and three of its own sentences point at it.
An in-network pharmacy agreed to a discounted price. A preferred pharmacy agreed to charge less than others in the network. An out-of-network refund never includes the cost-sharing amount.
Every one of those describes an arrangement with no figure attached. Those three facts are the government's. Reading them together as one thing is ours.
This publication will not print a saving figure it cannot source. On a page about what your medicines cost you, an invented number is worse than no number.
What that leaves you is the last section of this article, which is the only way to see a real amount for your own prescriptions.
Is mail order cheaper?
Some plans offer a mail-order program that sends up to a 3-month supply of your covered drugs to your home, and some also offer an automatic refill service on those drugs. Medicare.gov describes it as possibly cost-effective and convenient for drugs you take regularly.
Again, notice the shape of the sentence. It says may be cost-effective, not is cheaper. The comparison depends on your plan.
You do not have to use mail order to get a larger supply. However you choose to get your drugs, you can contact your plan and ask whether you can get a 2-month or 3-month supply of a drug you take regularly, and some pharmacies offer those larger supplies over the counter.
A larger supply changes the number of times you pay rather than what a month costs. That is a different kind of saving from a preferred pharmacy discount, and it is worth asking your plan about separately.
What if my pharmacy leaves the network?
This is the honest gap in this article, and it is worth saying so plainly rather than filling it. Five government pages were read for this piece and none of them describes what happens when a pharmacy leaves your plan's network partway through the year.
Two nearby rules are published and they are the closest thing to an answer.
The first is what an out-of-network fill costs you, covered in the next section. The second is a rule about the drug list rather than the pharmacy list: if your plan changes its list of covered drugs for a drug you are taking, it owes you written notice, and that is covered in this publication's article on whether your drug is covered.
Neither is the same subject, and neither should be read as if it were.
For your own plan and your own pharmacy, the number that answers this is 1-800-MEDICARE, on 1-800-633-4227, with TTY on 1-877-486-2048. Your plan can also tell you directly, and it is the party that knows.
Do prices differ between pharmacies?
Yes, and the gap is widest at the edge of the network. Out-of-network pharmacies are not part of your plan's network and usually offer drugs at a higher cost. If you buy there, you will probably have to pay full cost for the drug.
There is a partial route back and it has a hole in it. Save your receipts and ask your plan whether it will refund part of what you paid. You will not get back the out-of-network cost-sharing amount, and your plan sets its own process for submitting the claim.
Here is what each arrangement does to your money.
| Pharmacy type | What it agreed to | What it costs you |
|---|---|---|
| In network | A discounted price for members of certain plans | Your normal share. In some plans, the only covered route |
| Preferred in network | To charge less than others in the same network | Possibly less than a standard in-network pharmacy |
| Mail order | To send up to a 3-month supply to your home | Set by your plan, and described as possibly cost-effective |
| Out of network | Nothing. It has no contract with your plan | Probably full cost, with only a partial refund available |
A separate thing can also make two counters differ on the same day. Your plan's own drug list can move a drug to a costlier place on its tiers, which is covered in this publication's article on Part D drug tiers.
How do I compare?
You compare by putting your actual drug list into Medicare's plan finder at Medicare.gov/plan-compare, which shows which plans cover the drugs you take and lets you look at pharmacies in your area. That is where a real number appears instead of a rule.
Two documents help you check the answer afterwards, and both clocks start when your plan receives your completed application rather than when you send it. Within 2 weeks a letter arrives confirming the plan has your information. Within 5 weeks the welcome package arrives with your plan ID card.
Bring a photo ID and your drug plan card to the counter. Bring your red, white and blue Medicare card as proof you have Medicare, and if you have Medicaid or qualify for Extra Help, bring proof of that too, which helps make sure you do not pay more than you should.
If you arrive before your card does, the plan's welcome or confirmation letter works, so does an enrollment confirmation number with the plan's name and phone number, and so does a copy of your official Medicare card printed from your secure Medicare account. Failing all of that, the pharmacist may find you with your Medicare Number.
And if none of it works on the day, your doctor may be able to give you a sample to get by, or you pay and claim. Save the receipt either way.
What this means for you
Two questions decide your bill at the counter, and they are not the same question. Is the pharmacy in your plan's network, which can decide whether you are covered at all. And is it a preferred one, which decides how much of the bill is yours.
The saving from a preferred pharmacy is real and it is unpublished. Medicare says the pharmacy agreed to charge less than others in the network and never says by how much, so the only honest answer to how much you save is the one your own comparison gives you.
Going outside the network costs the most. You will probably pay full price, and the refund route back is partial by design.
One question in this article has no published answer at all. If your pharmacy leaves your plan's network mid year, no government page read describes what follows, and the place to ask is your plan or 1-800-MEDICARE.
For how your plan's drug list works, read this publication's article on whether your drug is covered. For what decides the size of your share, read the article on Part D drug tiers.
FAQ
Does every Medicare drug plan have preferred pharmacies?
No. Medicare's wording is conditional: if your plan has preferred in-network pharmacies, they may save you money on your out-of-pocket drug costs because they agreed to charge less than other pharmacies in that plan's network.
A plan can have a network without having a preferred layer inside it, and that is not a defect in the plan. What every plan does have is a position on in-network pharmacies, which have contracts with the plan and agreed to offer a discounted price for members.
In some Medicare plans your drugs are only covered when you fill them at an in-network pharmacy, so the first thing worth checking is not whether a pharmacy is preferred but whether it is in the network at all.
How much does a preferred pharmacy actually save me?
No government page states an amount. Medicare says only that a preferred in-network pharmacy may save you money on out-of-pocket costs such as a copayment or coinsurance, because it agreed to charge less than other pharmacies in the network.
There is no percentage, no dollar range and no worked example published anywhere on the government's pages read for this article, and this publication will not print a figure it cannot source.
The way to get a real number for your own prescriptions is Medicare's plan finder at Medicare.gov/plan-compare, which takes the drugs you actually take and shows what plans and pharmacies in your area would cost.
What happens if I fill a prescription at an out-of-network pharmacy?
You will probably have to pay full cost for the drugs. Out-of-network pharmacies are not part of a plan's network and usually offer drugs at a higher cost. There is a partial route back: if you paid full cost, save your receipts and ask your plan whether it will refund you for a portion of what you spent.
The limit on that is stated directly by Medicare, and it is the part worth knowing before you are standing at the counter. You will not get a refund for the out-of-network cost-sharing amount. Each plan sets its own process for submitting the claim, and its own rules about out-of-network fills, so the plan is the place to ask.
Can I get a 3-month supply without using mail order?
Possibly. Medicare states that however you choose to get your drugs, you can contact your plan to see whether you can get a 2-month or 3-month supply of drugs you take regularly, and it notes that some pharmacies offer those larger supplies.
Mail order is one route to the same thing: some plans offer a program that sends up to a 3-month supply of covered drugs to your home, sometimes with an automatic refill service.
Medicare describes both as possibly cost-effective and convenient rather than as cheaper, because the comparison depends on your plan. A larger supply mainly changes how often you pay rather than what a month costs you.
What do I bring to the pharmacy?
Bring a photo ID, such as a state driver's license or passport, and your card for Medicare drug coverage. Medicare also advises bringing your red, white and blue Medicare card as proof that you get Medicare.
If you have both Medicare and Medicaid, or you qualify for Extra Help, bring proof of that as well, because it helps make sure you do not pay more than you should for your prescription drugs. You can still fill a prescription if your new plan card has not arrived.
Three things prove your coverage: the acknowledgement, confirmation or welcome letter from the plan, an enrollment confirmation number with the plan's name and phone number, or a copy of your official Medicare card printed from your secure Medicare account.
What if the pharmacist cannot find my drug plan?
Give them your Medicare Number, or the last four digits of your Social Security Number, because the pharmacist may still be able to retrieve your drug plan information that way. If that does not work, Medicare describes two outcomes.
Your doctor may be able to give you a sample of the prescription drug to help you get by until your coverage is confirmed, or you may have to pay out of pocket for the drugs that day.
If you do pay, save your receipts and contact your plan. You may be able to get back some of what you spent, or have the amount credited toward your out-of-pocket costs, which matters because that running total affects what you pay later in the year.
