Medicaid Coverage for Prescription Medications: What’s Included in 2025

When you’re on Medicaid, getting your prescriptions shouldn’t feel like a maze. But for many people, it is. Even though Medicaid covers prescription drugs in every state, what’s actually covered, how much you pay, and how you get it can vary wildly depending on where you live. If you’ve ever been told your medication isn’t on the list, or had to try three other drugs first before getting the one your doctor prescribed, you’re not alone. Here’s what’s really included in Medicaid prescription coverage in 2025 - and what’s not.

Medicaid Covers Prescriptions - But Not All of Them

Medicaid is required to cover outpatient prescription drugs for nearly all enrollees. That’s not optional - every state provides it. But that doesn’t mean every single drug is covered. States build their own Preferred Drug Lists (PDLs), which act like a filter. These lists decide which medications are preferred (cheaper and easier to get) and which are non-preferred (harder to access, often requiring extra steps).

For example, in North Carolina, a generic blood pressure pill might be on Tier 1 - meaning you pay $5 or less. But if your doctor prescribes a brand-name version of the same drug, it’s likely on Tier 2, and you’ll pay $30 or more. Some drugs aren’t on the list at all. In October 2025, North Carolina removed drugs like Trulance, Uceris, and Relistor from coverage because they no longer qualified for federal rebates. That means even if your doctor says you need it, Medicaid won’t pay unless you get special approval - and even then, it’s not guaranteed.

Tiered Formularies: How Much You Pay Depends on the Tier

Almost every state uses a tiered system for prescription drugs. Think of it like a pricing ladder:

• Tier 1: Generic drugs. Lowest cost. Usually $0-$5 copay.
• Tier 2: Preferred brand-name drugs. Moderate cost. Usually $10-$30 copay.
• Tier 3: Non-preferred brand-name drugs. Higher cost. Often $40-$60 or more.
• Tier 4: Specialty drugs. High-cost medications for complex conditions like cancer, MS, or hepatitis C. Copays can be $100+ or a percentage of the drug’s total price.

Generic drugs make up 89% of all Medicaid prescriptions - but only 27% of the total spending. Why? Because they’re cheap. Specialty drugs, which only account for 3% of prescriptions, make up 42% of Medicaid’s drug spending. That’s why states are so strict about who gets them.

Step Therapy: You Have to Try Cheaper Drugs First

Step therapy - also called “trial and failure” - is one of the biggest roadblocks. In 38 states, including North Carolina and Florida, you must try and fail on at least two preferred drugs before Medicaid will pay for the one your doctor originally prescribed.

Let’s say you have depression and your doctor wants to prescribe Wellbutrin XL. But Wellbutrin isn’t on Tier 1 or 2. Medicaid will make you try two other antidepressants first - like sertraline or escitalopram. If those don’t work, or cause bad side effects, your doctor must submit paperwork proving why they failed. Only then will Medicaid approve Wellbutrin. This process can take days or weeks. A 2024 survey found that 63% of Medicaid beneficiaries experienced delays because of step therapy.

There are exceptions. If there’s only one drug in a class, or if your condition is urgent (like a recent cancer diagnosis), you can skip this step. But proving that often means your doctor has to write a detailed letter - and not all clinics have the time or resources to do it.

Prior Authorization: The Paperwork Hurdle

Even if a drug is on the formulary, you might still need prior authorization. This means your doctor has to ask Medicaid for permission before the pharmacy can fill it. It’s common for drugs like insulin pens, mental health medications, and rheumatoid arthritis biologics.

In North Carolina, prior authorizations for premixed insulin in Type 1 Diabetes patients can be approved for up to three years - if the right documentation is submitted. But for other drugs, the approval window might be just 30 days. And if the paperwork is incomplete? The pharmacy won’t fill it. No second chances.

Here’s the good news: 78% of denied prior authorizations are overturned on appeal - if you submit complete medical records. That means if you get denied, don’t give up. Ask your doctor to resubmit with detailed notes about your condition, previous treatment failures, and why the requested drug is medically necessary.

What About Costs? Copays, Deductibles, and Extra Help

Medicaid doesn’t have a deductible for prescriptions. Your out-of-pocket cost is just the copay - and it’s capped. In most states, generic drugs cost $0-$5. Brand-name drugs are $10-$30. Specialty drugs vary but are often capped at $50-$100 per fill.

But there’s a secret weapon: Extra Help. If you get full Medicaid coverage, you automatically qualify for Extra Help - a federal program that lowers Medicare Part D drug costs. In 2025, that means:

• $0 monthly premium
• $0 deductible
• $4.90 copay for generics
• $12.15 copay for brand-name drugs
• Once you hit $2,000 in total drug costs for the year, you pay $0 for the rest

And here’s the kicker: about 1.2 million people who qualify for Extra Help don’t even know it. If you’re on Medicaid, you’re already eligible. You don’t need to apply separately. Just ask your pharmacist or call your state’s SHIP (State Health Insurance Assistance Program) hotline.

Network Pharmacies and Mail Order

You can’t just walk into any pharmacy. Medicaid works with specific networks. CVS Caremark, Express Scripts, and OptumRx manage pharmacy benefits for most states. If you go to a non-partner pharmacy, you’ll pay full price - and Medicaid won’t reimburse you.

For maintenance medications (like blood pressure pills or diabetes drugs), many states require you to use mail-order services. You’ll get a 90-day supply shipped to your home, often at a lower cost. It’s convenient - but you need to plan ahead. Running out? You’ll have to wait days for a refill.

State-by-State Differences Matter

There are 50 different Medicaid programs. What’s covered in Florida isn’t the same as in North Carolina. Florida has a separate Quick Reference Guide for physician-administered drugs - things like injections given at a clinic. North Carolina removed 12 drugs from its formulary in 2025. Some states allow one step therapy trial; others require two. Some allow exceptions for mental health; others don’t.

There’s no national standard. That’s why knowing your state’s current Preferred Drug List is critical. You can find yours on your state’s Medicaid website - or ask your pharmacist. Don’t assume your coverage from last year is still the same. Formularies change every quarter.

What’s Changing in 2025 and Beyond

The Inflation Reduction Act capped Medicare Part D out-of-pocket costs at $2,000 per year starting in 2025. That helps dual-eligible people (those on both Medicare and Medicaid) - but doesn’t change Medicaid’s own rules. Still, it’s one less financial worry.

Also in 2025, Medicaid beneficiaries can now change their drug coverage once a month - not just during the annual enrollment period. That’s huge. If a drug stops working or becomes too expensive, you can switch faster.

Looking ahead, CMS is planning new rules in early 2026 to make sure state formularies don’t block access to medically necessary drugs. And with 12-15 new gene therapies expected to hit the market by 2027 - each costing over $2 million - states are scrambling to find ways to pay for them without bankrupting their budgets. Value-based contracts are growing: if a drug doesn’t work, the manufacturer pays back part of the cost.

What You Can Do Right Now

Don’t wait for a problem to happen. Here’s how to take control:

1. Find your state’s current Preferred Drug List. Search “[Your State] Medicaid Preferred Drug List 2025.”
2. Check if your meds are on it. Look up your drug by name - not brand, not generic. Use the exact spelling.
3. Ask your pharmacist. They know the formulary better than you do. Ask: “Is this on the list? Do I need prior auth?”
4. Ask about Extra Help. If you’re on Medicaid, you’re already eligible. Confirm with your state’s SHIP hotline.
5. Keep records. Save every denial letter. Keep copies of your doctor’s notes. You’ll need them if you appeal.

Medicaid prescription coverage is complex - but it’s designed to work for you. You just have to know how to navigate it. The system isn’t perfect. But with the right info, you can get the meds you need without the stress.

Knowing your rights and your state’s rules is the best way to avoid surprises. Medicaid is meant to help - but you have to be your own advocate.