When you’re on Medicaid, getting your prescriptions filled shouldn’t feel like a maze. But for many, it is. Medicaid covers prescription drugs for over 85 million Americans in 2026 - that’s more than one in four people in the U.S. But what drugs are actually covered? How much do you pay? And why does it change from state to state? The answer isn’t simple. It depends on where you live, what drug you need, and whether your doctor jumps through the right hoops.
Medicaid Must Cover Prescriptions - But States Decide Which Ones
Federal law doesn’t force states to cover prescription drugs under Medicaid. Sounds strange, right? But here’s the twist: every single state does cover them anyway. Why? Because without drug coverage, people skip doses, end up in the ER, and cost the system more in the long run. So all 50 states and D.C. offer outpatient prescription drug benefits to nearly all Medicaid enrollees.
But here’s the catch: states get to pick which drugs are on their list. That list is called a Preferred Drug List (PDL). It’s not just a catalog - it’s a ranking system. Drugs are split into tiers, and your out-of-pocket cost changes depending on where your medicine lands.
How the Tier System Works
Think of your prescription like a hotel. Tier 1 is the economy room. Tier 3 is the suite. Most states use three or four tiers:
- Tier 1: Generic drugs. These are the cheapest. You’ll usually pay $1-$5 per prescription. Most common meds like metformin, lisinopril, or atorvastatin fall here.
- Tier 2: Brand-name drugs with generic alternatives. These cost more - often $15-$30. Your copay jumps because the state wants you to try the cheaper version first.
- Tier 3: Brand-name drugs with no generic. These can cost $40-$100. Think newer diabetes drugs or biologics for rheumatoid arthritis.
- Tier 4 (if used): Specialty drugs. These are the expensive ones - cancer treatments, rare disease therapies, gene therapies. Copays can hit $300+ unless you qualify for extra help.
Some states, like North Carolina, have even more detail. They’ll tell you if a drug is “preferred” or “non-preferred.” If it’s non-preferred, you might need prior authorization just to get it - even if it’s the only one that works for you.
Step Therapy: The “Try Before You Get” Rule
Ever hear of “trial and failure”? That’s step therapy. States require you to try one or two cheaper drugs before they’ll cover the one your doctor prescribed.
Example: Your doctor prescribes Wellbutrin XL for depression. But your state’s formulary says you must first try two other SSRIs - say, sertraline and escitalopram - and they must have failed. Only then will Medicaid approve Wellbutrin. If you tried one and it didn’t work? You still have to try the second. And if you skip this? Your pharmacy won’t fill it.
Thirty-eight states use this rule. North Carolina requires two failed attempts for most drug classes. Florida does too. But some states are more flexible - especially for mental health, epilepsy, or rare diseases.
The goal? Save money. The reality? Many people wait weeks for approval. A 2024 survey by the Medicare Rights Center found 63% of Medicaid users faced delays. The average wait for approval? Over a week. Appeals? Two weeks. That’s not just frustrating - it’s dangerous.
Prior Authorization: What Your Doctor Has to Do
Some drugs aren’t just restricted - they’re locked. To get them, your doctor must submit paperwork. This is called prior authorization.
What’s required? Usually:
- A note from your doctor explaining why the drug is medically necessary
- Proof you tried (and failed) other options
- Lab results or diagnosis codes
For example, if you have Type 1 Diabetes and need premixed insulin, North Carolina allows prior authorization to last up to three years - if your doctor documents ongoing need. But if you switch to a new provider? You might have to start over.
Here’s the kicker: 78% of denied prior authorizations are overturned when the doctor submits full documentation. So if your claim gets denied, don’t give up. Ask your doctor to resubmit with more detail.
Costs You Actually Pay - And How to Lower Them
Most Medicaid enrollees pay little to nothing. But it’s not always zero.
In most states:
- Generics: $0-$5
- Brand-name: $5-$15
- Specialty drugs: $10-$50 (sometimes more)
But if you qualify for Extra Help - a federal program for people with low income - your costs drop even further. In 2026:
- $0 premium
- $0 deductible
- $4.90 copay for generics
- $12.15 for brand-name drugs
- Once you hit $2,000 in total drug costs for the year? You pay $0 for everything else.
Here’s the problem: 1.2 million people eligible for Extra Help don’t even know they qualify. If you have full Medicaid coverage, you automatically qualify. But you have to ask. Call your state Medicaid office. Ask: “Am I eligible for Extra Help?”
Why Your Drug Might Vanish From the List
Formularies change. All the time. In October 2025, North Carolina removed 11 drugs from its preferred list - including Vasotec, Diastat, and Trulance - because they no longer qualified for federal rebates. In July 2025, Epidiolex®, a life-changing epilepsy drug, was moved from preferred to non-preferred. That meant higher costs and more paperwork for hundreds of patients.
Why does this happen? It’s all about money. Drug manufacturers pay rebates to states. If a drug doesn’t offer a big enough rebate, it gets cut. It’s not about safety. It’s about cost.
States also remove drugs that are no longer cost-effective. For example, hepatitis C cures used to cost $80,000 per treatment. Now, with competition and rebates, some cost under $25,000. So older drugs get phased out.
Where to Get Help - And What to Do When Things Go Wrong
You’re not alone. Millions of people struggle with this system. But help exists.
- State Health Insurance Assistance Programs (SHIP): Free counselors who know your state’s rules. Call them. They’ll walk you through prior auth, formularies, and appeals. In 2025, 64% of their calls were about pharmacy issues.
- Your pharmacy: Ask if they’re in-network. If you go to an out-of-network pharmacy, you’ll pay full price - and Medicaid won’t cover it.
- Your doctor: If a drug is denied, ask them to write a letter of medical necessity. Include your diagnosis, failed alternatives, and why this drug is critical.
- Medicaid office: Request a copy of your state’s current formulary. Most post them online. North Carolina’s is updated every July and October.
And if you’re denied? You have the right to appeal. The process usually takes 10-14 days. If you’re sick or in crisis, ask for an expedited review. You don’t have to wait.
What’s Changing in 2026
Things are shifting. In early 2026, CMS will require states to prove their formularies don’t block access to medically necessary drugs. That’s a big deal. It means states can’t just cut drugs because they’re expensive - they have to show there’s a safe, effective alternative.
Also, starting in 2026, Medicaid beneficiaries can change their drug coverage once a month - not just once a year. That gives you more flexibility if a drug is removed or your needs change.
And there’s more: 22 states are now testing new payment models for gene therapies - drugs that cost over $2 million per dose. These programs link payment to outcomes. If the drug works? The state pays. If it doesn’t? They pay less. It’s experimental - but it could change how we pay for life-saving treatments.
Final Takeaways
- Medicaid covers prescriptions - but not all drugs. Each state has its own list.
- You may need to try cheaper drugs first (step therapy).
- Prior authorization is common. Get your doctor involved.
- Generics cost next to nothing. Brands cost more. Specialty drugs cost a lot - unless you qualify for Extra Help.
- Formularies change. Check yours every 6 months.
- If you’re denied, appeal. With proper documentation, most denials get reversed.
- Extra Help is automatic if you have full Medicaid. Ask your state.
Medicaid pharmacy coverage isn’t perfect. But it’s designed to keep people alive - not broke. Knowing how it works is the first step to getting what you need.
Does Medicaid cover all prescription drugs?
No. Medicaid covers outpatient prescription drugs, but each state creates its own list of approved medications called a Preferred Drug List (PDL). While nearly all states cover drugs for all eligible enrollees, some drugs are excluded or require prior authorization. The list changes based on cost, rebates, and clinical guidelines.
Why do I have to try other drugs before getting the one my doctor prescribed?
This is called step therapy or "trial and failure." States require you to try one or two lower-cost, preferred drugs before covering a more expensive brand-name or specialty drug. The goal is to reduce costs while still ensuring access. But exceptions exist - for example, if the only available drug in a class is the one your doctor prescribed, or if you have a documented allergy or failure to other options.
How much will I pay for my prescriptions under Medicaid?
Most Medicaid enrollees pay $0-$5 for generics and $5-$15 for brand-name drugs. Specialty drugs may cost $10-$50 or more. If you qualify for Extra Help (Low-Income Subsidy), your copays drop to $4.90 for generics and $12.15 for brand-name drugs, with $0 cost after you hit $2,000 in annual spending. Some states have $0 copays for all drugs.
Can my Medicaid drug coverage change without notice?
Yes. States update their formularies multiple times a year - often in July and October. If a drug is removed, you’ll usually get a notice from your pharmacy or Medicaid plan. But not always. That’s why it’s important to check your state’s current Preferred Drug List every six months. If a drug you need is removed, you can appeal or ask your doctor to request prior authorization.
Do I have to use a specific pharmacy to get my Medicaid-covered drugs?
Yes. You must use a pharmacy in your state’s Medicaid network. Out-of-network pharmacies won’t bill Medicaid, and you’ll pay full price. Most states have thousands of network pharmacies - including CVS, Walgreens, and local independents. Mail-order pharmacies are often required for maintenance medications like blood pressure or diabetes drugs, as they offer lower costs and automatic refills.
How do I find out what drugs are covered in my state?
Visit your state’s Medicaid website and search for "Preferred Drug List" or "Formulary." For example, North Carolina publishes its PDL online with updates dated July 1 and October 1 each year. You can also call your state’s Medicaid office or ask your pharmacist. Many states offer searchable databases where you can type in your drug name and see its tier and any restrictions.
What if my drug is denied for prior authorization?
You have the right to appeal. Your doctor must submit a letter of medical necessity explaining why the drug is essential - including your diagnosis, past treatment failures, and risks of not using it. With complete documentation, 78% of initial denials are overturned on appeal. If you’re in urgent need, request an expedited review - most states must respond within 72 hours.
Can I get help paying for my medications if I’m on Medicaid?
Yes - if you qualify for Extra Help, a federal program for people with low income. If you have full Medicaid coverage, you automatically qualify. Extra Help lowers your copays to $4.90 for generics and $12.15 for brand-name drugs, with $0 cost after $2,000 in annual spending. Many people don’t know they qualify. Call your state Medicaid office or visit Medicare.gov to confirm your eligibility.
1 Comments
Ashlyn Ellison
My mom’s on Medicaid and just got denied her insulin because it moved to tier 4. We had to appeal. Took three weeks. She nearly skipped doses. This system is broken.