Key Takeaways
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Reviewing your prescription formulary every AEP helps you avoid cost surprises and access issues for the upcoming year.
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Even a minor change in medication tier placement can significantly affect what you pay throughout 2026.
Understanding Why Formularies Matter Every AEP
When you review your Medicare choices during the Annual Enrollment Period running from October 15 to December 7, you are deciding how your coverage will work from January 1 to December 31, 2026. One of the most important parts of this review is your prescription drug formulary. Formularies can change every year, and these adjustments often influence whether you stay with your current plan or look for a different one.
A formulary is simply a list of medications that your plan covers. However, the details behind that list can affect your access, your costs, and your overall experience throughout the year. Because formularies are updated annually, many beneficiaries base their entire plan switch on how these updates affect the prescriptions they rely on daily.
Below are five major reasons why beneficiaries switch plans based entirely on changes in formularies.
1. Why Do Tier Changes Affect Your Overall Costs?
Medication tiers determine how much you pay for your prescriptions. Even if a medication stays on the formulary, a shift from one tier to another can change your cost throughout the year. When a drug moves to a higher tier, the out-of-pocket costs typically rise. If you take multiple medications, even one tier adjustment can change your total annual spending.
During AEP, reviewing the tier placements for each medication you take helps you understand whether your current plan will remain affordable. Costs can shift based on updated plan structures, market changes, and broader Medicare adjustments. You may find that a plan that worked well for you in 2025 will not offer the same level of affordability in 2026.
2. Why Does Prior Authorization Make Some Beneficiaries Switch Plans?
Plans may require prior authorization for certain medications. Prior authorization means your doctor must receive approval from the plan before the medication is covered. Plans update these requirements each year, and these changes can affect your ability to access important treatments.
If prior authorization is added to a medication you regularly take, it could create delays or add extra steps to your care. For some beneficiaries, this added requirement is enough to consider switching during the October 15 to December 7 window. Reviewing these changes helps you avoid unexpected administrative hurdles once the new year begins.
3. Why Do Quantity Limits and Step Therapy Lead To Plan Switching?
Plans often adjust quantity limits or introduce step therapy rules. Quantity limits control how much medication you can receive within a certain period. Step therapy requires trying lower-cost options first before the plan covers a more expensive medication.
Both of these restrictions can change year to year. If the medication you use becomes subject to stricter quantity limits or new step therapy rules starting January 1, 2026, it may disrupt how consistently or easily you can follow your treatment plan.
Beneficiaries who have long-term medication needs often review these details closely. Even one new restriction can create difficulties throughout the year, and switching plans during AEP allows you to avoid surprises.
4. Why Does Drug Removal From The Formulary Trigger A Plan Change?
Every year, plans have the ability to remove certain medications from their formularies. When a medication you take consistently is removed, you may face higher out-of-pocket costs because your plan would no longer cover it starting January 1.
If you depend on a medication for ongoing treatment, removal from the formulary may be one of the strongest reasons to switch plans. Reviewing the updated formulary from your Annual Notice of Change letter or through your plan’s materials helps you identify whether your medications will remain available.
Instead of waiting until January when the change takes effect, many beneficiaries use the October to December timeframe to transition to a plan that continues to cover their prescription needs.
5. Why Do Pharmacy Network Changes Affect Your Annual Costs?
Formularies and pharmacy networks work closely together. Some plans change the pharmacies they contract with or update preferred pharmacy arrangements each year. These changes influence what you pay because different pharmacy tiers often have different cost structures.
If your preferred pharmacy is no longer considered a preferred or in-network pharmacy in 2026, your prescription costs may rise even if the medication itself stays on the same tier. Reviewing these updates during the Annual Enrollment Period helps ensure you maintain predictable costs and convenient access to your medications.
Many beneficiaries switch plans solely because their pharmacy options change, which affects both cost and convenience.
Making Sense Of Formularies Before The Enrollment Deadline
Understanding your formulary changes early in the Annual Enrollment Period helps you make informed choices. You have from October 15 to December 7, 2025, to compare plan options and ensure your medications will remain affordable and accessible.
Take time to gather a complete list of your prescriptions, including dosages and frequency. Review tier placements, any new restrictions, and pharmacy network changes. This proactive approach helps you avoid unexpected out-of-pocket costs once your 2026 coverage begins.
If you need help reviewing your options, connect with any of the licensed agents listed on this website. They can explain how different formularies work and help you choose the coverage that fits your medication needs.
