Medical Expense✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
In a Medicare Part D plan, the 'tier' assigned to a drug on the plan's formulary indicates:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Part D formulary tiers rank drugs into levels that determine the enrollee's cost-sharing, generally with lower tiers carrying lower copays (for example, generic drugs) and higher tiers carrying higher copays or coinsurance (for example, brand-name or specialty drugs). The examination objectives require candidates to be able to explain formulary tiers and their importance, because tier assignment directly affects the enrollee's out-of-pocket cost. This concept is tested under AH-III.D.1g, and consumers are encouraged to review tier placement before choosing a plan.
Why the other options are wrong
- B) Pharmacy network access, not tier, determines where a drug may be filled.
- C) A manufacturer's market ranking has no bearing on the drug's formulary tier.
- D) FDA approval timing does not define the cost-sharing tier assigned by the plan.
Memory hook
Higher formulary tier = higher copay.