Medicare often covers even fewer or has more restrictions
May 6, 2025
- Health insurance, including Medicare and Medicaid, is increasingly covering fewer medications or has more restrictions.
- Medicare covers evenfewer medications or has more restrictions than commercial health insurance.
- Fewer medications are being covered largely because companies that negotiate drug prices are drivento cover medications that make them the most money.
Health insurance is covering fewer medications than years ago or forcing more patients to jump through hoops.
Health insurance covered 56% of medications and had restrictions, such as getting prior authorization, on 49% of medications in 2025, compared with 61% and 39%respectivelyin 2015, according to a report from prescription-drug website GoodRx.
Still, there is a bit of good news: Health insurance covered around 2% more medications and restricted 1% fewermedications in 2025 compared with 2024.
“While the pinch let up some this year, it certainly isnt gone,” GoodRx said.
Medicare patients are often dealing with even more challenges.
Medicare didn’t cover 44% of medications, compared with commercial health insurance not covering 21%, GoodRx said.
For restrictions, which are extra steps such as getting prior authorization, Medicare also fared worse with restrictions on 49% of medications, compared with 35% for commercial health insurance.
And even though Medicaid covered97% of medications, 63% of those medications hadrestrictions
When a medication isn’t covered or has restrictions, the first course of action is usually trying to find a cheaper alternative.
If that doesn’t work, patients can try to get an exception from their health insurer, apply for a patient assistance programor find a new health plan when enrollment opens up.
“For many Americans, the real hurdle to treatment isnt just medication prices its navigating the complex policies embedded in their health plan that dictate the cost they pay at the pharmacy counter,” GoodRx said.
Why are fewer medications being covered?
Drug formularies, the list of covered medications, are largely determined by pharmacy benefit managers (PBMs), which are companies that decide drug coverage on behalf of health insurers,Medicaid Part D plans, employersand other health care payers, The Leverreports.
PBMs negotiate with drug manufacturers on what health insurance will cover and how much the medications will cost, but they are incentivized to cover drugs that will make them the most money and have increasingly excluded less-profitable medications from formularies.
From 2014 to 2022, there was a 961% increase in prescription medications excluded byPBMs Express Scripts, CVS CaremarkorOptumRx, according to a reportfrom consultancy Xcenda for drug manufacturer AmerisourceBergen.
As a result, health insurance companies can change their list of covered medications throughout the year, leaving many patients unable to afford vital medications even after paying expensive insurance premiums.
In my experience as a practicing physician, one of the greatest administrative burdens Im facing is sudden, arbitrary changes to a patients medication coverage by their health plan, Steven Furr, president of the American Academy of Family Physicians, told The Lever. A patient can be doing well on a specific medication for years, and one day the plan no longer covers it or has a preferred alternative.
Despite the issue, there are few regulations limiting the exclusion of medications from coverage.
Plans can pretty much do what they please, within some broad parameters, Sabrina Corlette, co-director of the Center on Health Insurance Reforms at Georgetown Universitys McCourt School of Public Policy, told The Lever.
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