Coverage for prescription drugs can be a complicated part of your health insurance plan. It’s common for a plan to cover at least some drugs, but few plans will cover all available medications. Much of the time, what you pay within your plan will depend on the specific drug. Here, we’ll talk about how you can look for variations in the particulars of your health insurance plans for prescription drugs.

Your Plan’s Formulary

Health care plans are often part of Medicare (or Medicare Advantage) and are governed by the basic rules of Medicare support. Such insurance plans usually group the kinds of drugs they cover using a “formulary” — a set of rules for what kinds of drugs are covered in different ways.

You can generally find a plan’s formulary on your insurer’s website, using the name of the plan or the number of your insurance card (if you’re already covered). Alternatively, if you can’t find the information online, you can call and request that the insurer send you a copy of it. If you want to find out the details of a drug’s coverage under a certain formulary, you might also do this over the phone.

What a formulary tells you is which tier — a group of drugs assembled by expense — particular drugs are in. Your co-payment (a flat fee at the point of service) for a prescription drug is based on its tier. Each plan has its own formulary with its own tiers, and often the number of tiers and the type of drugs in each will vary.

However, there are some fairly common patterns to tiers of drug insurance.

Common Patterns for Drug Insurance Tiers

  • Tier 1: Typically, the plan’s least expensive drug tier, often comprised of generic drugs. These drugs often work much the same as brand-name counterparts but represent substantial savings.
  • Tier 2: Pricier generics and brand-name drugs that a plan identifies as “preferred” will generally appear in Tier 2. It’s worth double-checking with your physician about whether a brand-name drug in this tier is a good option for you, as it’s typically at this tier that you’ll find the most cost-efficient brand-name prescriptions.
  • Tier 3:  If a brand-name drug is likely to come with a significant co-pay fee, it will most often appear at this tier or above.
  • Tier 4: Usually, a formulary’s most expensive tier, the fourth tier is typically comprised of rare and expensive drugs, drugs in certain protected classes, or drugs that are used to treat uncommon conditions.

Medicare plans will typically include drugs involved in medication-assisted addiction treatment, including drugs like methadone and buprenorphine and substances used to treat opioid use disorders. What specific tiers these will be covered at depends on whether the insured is in an inpatient program or an outpatient treatment program. This kind of information should appear in your plan’s formulary. 

What’s a Generic Drug?

What makes a valid generic drug according to the Food and Drug Administration (FDA) is that it matches the brand-name drug it copies in each of these particulars:

  • Intended use
  • Active ingredients
  • Performance characteristics
  • Dosage
  • Strength
  • Method of administration
  • Safety precautions
  • Quality

Any company manufacturing a generic drug needs to prove to the FDA’s satisfaction that the product matches the brand-name original in all the above categories.

Sometimes, generic drugs applicable to your prescription might not be entirely identical to a familiar name-brand option but might be close. In this case, it’s worth talking to your doctor about whether a near alternative is safe to try. 

Under Medicare, if your formulary doesn’t include a specific drug, it may be possible to find a similar drug that is covered at that tier. If your physician or your health provider can’t find coverage for a needed drug in your formulary, you can check in with Medicare online to inquire about an exception.

There are times when a plan might make mid-year changes to its drug list if there are changes in the available drugs or if new research or kinds of therapies come to light. New developments might also occur if a manufacturer recalls a drug or the Food and Drug Administration (FDA) rules a substance unsafe.

Alternatively, there are certain plans that can switch out brand name drugs from a formulary for new generics on the market, or which might update costs and coverage rules for existing drugs as fresh generics come out.

Your insurer should inform you about changes like this in writing no less than 30 days prior to any change. If it happens while you’re requesting a refill, that written notice should also come with a month’s supply of the prescription under the previous plan rules.

On the whole, your health insurance provider should negotiate with the manufacturer of each drug on your plan’s formulary to make sure that your plan is saving you money. If you can’t find an applicable drug on your formulary and can’t get an exception, you may find yourself paying full price instead of a co-payment fee.

Use TrueCoverage and Avoid Surprise Expenses

From time to time, you may try to fill a prescription at your local pharmacy only to discover the expense is more than you expected. It’s important to remember that you don’t have an obligation to buy at the higher rate. You should always be able to contact your physician or your health insurance provider and see if there’s a less expensive option available.

There are other ways of avoiding the unexpected:

  • Have a specific idea in mind of what you’re shopping for in terms of coverage when you start out.
  • Be sure to review that any prescription drugs you need are covered by any new health insurance plan you’re looking at.
  • Pay close attention to whether prescriptions are covered by co-pays or have to be dealt with after you’ve paid out your annual deductible.
  • Find out the full details of your new plan’s formulary and where any needed prescriptions would fit in its tiers.

Above all, make use of the online research resources of TrueCoverage to make your search for information easy and to find the most affordable and effective option for you. The health plan experts at TrueCoverage are dedicated to helping you find and enroll in a plan. Reach them by phone at (888) 505-1815 or email them at [email protected] to make sure that your plan supports the prescriptions and prices you need the most.

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