Presciption Drug Coverage


Having a condition that requires regular prescription medications can get very costly. Getting a health insurance plan that covers prescription medications can help you save tons of money in the long run, and hundreds each month. An important consideration to make is, of course, finding out if the specific prescriptions you need will be eligible for benefits. Some medications are not covered, and those that are will be included in a list in every health policy called a formulary.

Insurance companies have four categories where they place medications that are covered under their policies, which are referred to as tiers. Each tier represents a different cost level, one being the lowest, and four being the highest. The following explains a bit about the four tiers of prescription medications covered by insurance:

  • Tier 1 – Generics

Generic medications are less expensive, non-brand name drugs. They are made of the same ingredients as the brand name, and are FDA-approved to function the same way.  The reason they can cost less is because generics do not take huge amounts of money in the research and advertising processes, though they should work like their more expensive equivalent.

  • Tier 2 – Preferred Brand Name

Brand name drugs with a less expensive, generic alternative are included in Tier Two. These are frequently used for medical care, and they typically have a more expensive co-pay than generic drugs.

  • Tier 3 – Non-Preferred Brand Name

Tier Three consists of non-preferred brand name medications, which have the most costly copayments. Drugs included in this tier sometimes have an equivalent in Tier One or Tier Two. These are not used very regularly in medical care.

  • Tier 4 – Specialty Drugs

Specialty drugs are medications that call for special dosage and treatment. Tier Four medications also have the highest copayments, and are commonly managed and monitored by a doctor, specialist, or other health care professional. Below is an example of one health insurance company’s Tier Four list:

The medications included in each tier may not be covered by every health insurer or every health plan. You must make sure your plan has a prescription drug coverage option and then find out which drugs are covered in the formulary.

 

Sources:

1. GoHealthInsurance.com, “Your Prescription Drug Formulary”. http://www.gohealthinsurance.com/health-insurance-information/prescription-drug-formulary.html

2. BCBS of North Carolina, “Tier 4 – Specialty Drugs”. http://www.bcbsnc.com/content/services/formulary/tier4-drug-list.htm