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What are Part D drug tiers and copays?

A tier is a price group. Every Part D plan sorts its drugs into tiers, and the tier sets your copay. The same drug can sit on different tiers in different plans.

Updated September 3, 2026 · 3 min read · by Gerino Alejos

A tier is a price group. Every Part D plan sorts its covered drugs into tiers, and the tier decides what you pay at the pharmacy. The same medication can be tier 2 on one plan and tier 4 on another.

The usual tier structure

Each tier carries either a copay, a fixed dollar amount you pay per fill, or coinsurance, a percentage of the drug's price.

• Tier 1, preferred generics. The lowest copay, often a few dollars or nothing.
• Tier 2, generics. A low copay.
• Tier 3, preferred brand name drugs. A moderate copay.
• Tier 4, non preferred drugs. A higher copay. This tier holds brand name drugs and some generics the plan has not favored.
• Tier 5, specialty drugs. Usually coinsurance instead of a flat copay.

Plans do not have to use exactly this setup. Some use six tiers or give them different names, but the idea is the same.

Copay versus coinsurance

This difference matters more than the tier number.

• A copay is a fixed dollar amount, so you know the price before you get to the counter.
• Coinsurance is a percentage of the drug's cost. On a specialty drug that costs thousands of dollars a month, a percentage of that price is a large bill every month.

Generic does not always mean tier 1

A generic can land on a non preferred tier when the plan has a better deal on a different drug. People assume a generic is always the lowest cost choice, and that is not always so.

The reverse happens too. A brand name drug can sit on a preferred tier when the plan has a strong rebate deal with the maker. Check the actual tier instead of guessing from the type of drug.

The pharmacy changes the price too

Most plans have preferred pharmacies and standard pharmacies. The same drug on the same tier can cost a noticeably different amount depending on where you fill it.

Mail order is often the lowest cost option for maintenance drugs, the ones you take every day. It is worth pricing for anything you refill every month.

Getting a drug moved to a lower tier

You can ask the plan for a tiering exception. That is a request to charge you the lower tier's price for a drug that sits on a higher tier. Your doctor backs the request by explaining why the preferred alternatives are not right for you.

These requests succeed more often than people expect. The main limit is that specialty tier drugs are usually not eligible for a tiering exception.

How to use tiers when choosing a plan

1. When you compare plans, look at the tier each of your drugs sits on, not just the total.
2. Flag anything on a specialty tier and check the coinsurance percentage.
3. Check whether your pharmacy is a preferred pharmacy for that plan.
4. Price mail order for the drugs you take every day.
5. If a drug sits on a high tier and another drug would work, talk to your doctor before you switch plans.

See the full method for comparing plans. If you want us to run your drug list through it with you, call our McAllen office or send us your ZIP code through the form on this page.

Gerino Alejos

Licensed insurance agent · License 3128710 · NPN 18243381

Owner of McAllen Insurance Group, an independent agency on North 10th Street in McAllen. Works with clients across Hidalgo, Cameron and Starr counties on Medicare, Marketplace health, life and auto coverage. Se habla español.