Millions of Americans rely on Medicaid to get the medicines they need - but knowing what’s covered isn’t always simple. If you’re on Medicaid and wondering whether your insulin, antidepressant, or arthritis pill is covered, you’re not alone. The truth is, Medicaid prescription coverage isn’t the same in every state, and even within a state, the rules change often. What’s covered today might be restricted tomorrow. Here’s exactly what’s included in Medicaid’s prescription drug benefits in 2025 - and what to watch out for.
Almost Everyone Gets Prescription Coverage - But Not the Same Way
Federal law doesn’t require Medicaid to cover prescription drugs, but every state does. Why? Because it’s cheaper for states to pay for medications than to pay for hospital visits when people can’t afford their pills. In 2025, Medicaid covers outpatient prescriptions for about 85 million people across the U.S. That’s nearly 1 in 4 Americans. But here’s the catch: while coverage is universal, the details aren’t. Each state runs its own program, sets its own rules, and negotiates its own deals with drug companies.How Medicaid Decides What Drugs to Cover
Medicaid doesn’t just pay for every drug on the market. Instead, each state creates a Preferred Drug List - or PDL - that sorts medications into tiers. Think of it like a menu with price labels. Tier 1 usually includes generic drugs. These are the cheapest and easiest to get. Tier 2 has brand-name drugs that don’t have a generic version yet. Tier 3 and higher? Those are specialty drugs - expensive, often for rare or chronic conditions like cancer or multiple sclerosis. States use these tiers to control costs. If a drug is on Tier 1, your copay might be $1 to $5. On Tier 2, you could pay $15 to $30. For specialty drugs, it can go up to $100 or more - unless you qualify for extra help.Step Therapy: You Might Have to Try Other Drugs First
One of the biggest surprises for new Medicaid users is step therapy. Also called “trial and failure,” this rule means you can’t get the drug your doctor prescribed right away. You have to try two cheaper, preferred drugs first - and prove they didn’t work. For example, if your doctor prescribes a newer antidepressant, Medicaid might require you to try two older, generic SSRIs first. Only after those fail - and your doctor documents it - will they approve the original prescription. This rule applies in 38 states as of 2025. North Carolina, for instance, requires two failed trials for most mental health and chronic disease medications. There are exceptions. If there’s only one drug in a class, or if your condition is too severe, your doctor can request an exception. But that means paperwork. And delays.Prior Authorization: The Hidden Hurdle
Even if a drug is on your state’s formulary, you might still need prior authorization. This is a formal request from your doctor to Medicaid saying, “This drug is medically necessary.” Without it, the pharmacy won’t fill the prescription. Common drugs that need prior authorization include:- High-cost specialty medications
- Drugs with safety warnings (like certain painkillers or antipsychotics)
- Medications used for off-label purposes
Costs You Might Still Pay
Medicaid doesn’t mean free drugs. You’ll usually pay a small copay. In 2025, most states cap copays at:- $1-$5 for generics
- $10-$20 for brand-name drugs
- $40-$100 for specialty drugs
What’s Not Covered?
Not every drug is covered. States remove medications from their formularies all the time - usually because they stop getting rebates from drugmakers. In North Carolina’s 2025 update, 12 drugs were dropped entirely, including:- Vasotec (blood pressure)
- Acanya (acne cream)
- Trulance (IBS-C)
- Uceris (ulcerative colitis)
How to Find Your State’s Formulary
You can’t guess what’s covered. You have to check. Every state publishes its Preferred Drug List online. In North Carolina, it’s updated in July and October. In Florida, it’s updated quarterly. You can find yours by searching “[Your State] Medicaid Preferred Drug List.” Many states partner with pharmacy benefit managers (PBMs) like CVS Caremark, Express Scripts, or OptumRx. These companies manage the formularies. Their websites often have searchable drug lists - just search by brand or generic name.
Where to Fill Your Prescriptions
You can’t just go to any pharmacy. Medicaid has a network. If you go outside it, you’ll pay full price. Most states require you to use in-network pharmacies - and many push you toward mail-order for maintenance drugs like blood pressure pills or diabetes meds. You’ll get a 90-day supply for the same cost as a 30-day retail fill. Check your state’s Medicaid website or call your PBM’s customer service line to find the nearest in-network pharmacy. Some states even have apps to help you locate them.What’s Changing in 2025 and Beyond
New rules are coming. The Inflation Reduction Act of 2022 capped out-of-pocket drug costs at $2,000 per year for Medicare Part D - and this helps dual-eligible patients (those on both Medicare and Medicaid). Starting in 2025, Medicaid beneficiaries can change their drug coverage once a month, not just once a year. That’s a big win for people whose needs change quickly. Also, CMS is preparing new guidelines for 2026 that will require states to prove their formularies don’t block access to medically necessary drugs. That could mean fewer step therapy barriers in the future. Meanwhile, drug prices keep rising. Specialty medications now make up just 3% of prescriptions but 42% of Medicaid’s drug spending. New gene therapies - costing over $2 million per dose - are coming. States are scrambling to find ways to pay for them without cutting other services.What to Do If You’re Struggling
If you’re denied a drug, don’t give up. Ask your doctor to submit a detailed letter explaining why the preferred drug won’t work for you. Keep copies of all paperwork. Call your state’s SHIP (State Health Insurance Assistance Program) - they offer free counseling. In Q3 2025, 64% of all SHIP calls were about Medicaid drug coverage issues. If you’re paying too much, check if you qualify for Extra Help. Even if you think you don’t, apply. The process is simple. You might be surprised.Bottom Line
Medicaid covers a lot of prescriptions - but it’s not a free-for-all. You’ll face formularies, step therapy, prior authorizations, and network restrictions. The system is designed to save money, not to make things easy. But you have rights. You have tools. And you’re not alone.Know your state’s formulary. Talk to your pharmacist. Ask your doctor for help with appeals. And if you’re confused - reach out. Millions before you have walked this path. You can too.
Does Medicaid cover all prescription drugs?
No. Medicaid covers most prescription drugs, but each state creates a Preferred Drug List (PDL) that limits which medications are covered. Some drugs are excluded entirely, especially if they’re expensive or no longer eligible for federal rebates. Even if a drug is on the list, you may need prior authorization or must try cheaper alternatives first.
What is step therapy in Medicaid?
Step therapy, also called trial and failure, means you must try and fail on two lower-cost, preferred drugs before Medicaid will cover the one your doctor prescribed. This applies to most chronic conditions like depression, diabetes, or arthritis. Exceptions exist if only one drug exists in the class or if your doctor provides proof that alternatives won’t work for you.
Do I have to pay for my Medicaid prescriptions?
Yes, most states require small copays: $1-$5 for generics, $10-$20 for brand-name drugs, and up to $100 for specialty drugs. If you qualify for Extra Help (Low-Income Subsidy), your copays drop to $4.90 for generics and $12.15 for brands. Once you hit $2,000 in annual drug spending, you pay $0 for covered drugs.
How do I find out what drugs are covered in my state?
Search for “[Your State] Medicaid Preferred Drug List” on your state’s health agency website. Many states use pharmacy benefit managers like CVS Caremark or OptumRx - their websites also have searchable formularies. Always check the most recent version, as lists change every few months.
Can I get my medication faster if I’m denied?
Yes. If your prior authorization is denied, you can appeal. Over 78% of appeals are approved when your doctor submits detailed clinical documentation showing medical necessity. You can also ask for an expedited review if your condition is urgent. Call your state’s SHIP program for free help with the appeal process.
What if my drug was removed from the formulary?
If your drug was removed, your doctor can request a one-time exception to continue your current medication for up to 90 days. After that, you’ll need to switch to a covered alternative or apply for a long-term exception based on medical need. Don’t stop taking your medication - contact your pharmacy or Medicaid office immediately to avoid interruption.
Do I have to use a specific pharmacy?
Yes. You must use a Medicaid-participating pharmacy. If you go to an out-of-network pharmacy, you’ll pay full price. Most states encourage or require mail-order for maintenance medications like blood pressure or diabetes drugs. Check your state’s Medicaid website or call your pharmacy benefit manager to find in-network locations near you.
Can I get help paying for my medications?
If you have full Medicaid coverage, you automatically qualify for Extra Help - a federal program that cuts your drug costs to $4.90 for generics and $12.15 for brands. Many people don’t know they’re eligible. Apply through your state Medicaid office or Medicare.gov. You can also contact your local SHIP counselor for free assistance.
