5 Questions to Ask About Your Prescription Medicine Coverage

Navigating health coverage can be complicated. Here are five questions for you and your family to ask to better understand your insurance plan’s prescription drug benefitHealth care items or services covered by health plans. Examples include emergency services, hospitalization, prescription drugs, laboratory services and wellness visits. and make sure your needed medicines are covered. For more information about your coverage, see your plan’s Summary of Benefits and Coverage (available from an insurance company), call the insurer directly or visit the insurer’s website.

1. Are my regular prescriptions covered by my insurance plan?

Many Americans take medications regularly. It is important to know if and how those medications are covered by your plan. Each insurance providerA person or entity that provides health care services. This could be a doctor, nurse, physician’s assistant or other health care service provider. Also see Network. has a formularyThe list of prescription medicines covered by a health insurance plan. A non-covered medicine is not included in the list of prescription drugs covered by an insurer. For non-covered medicines, patients must pay for the cost of the medicine or go through an exceptions process to get it covered. Also see Drug List or Tiers., or list of medicines covered by the plan. A non formulary medicine may not be covered by your health plan, requiring you to go through a lengthy process to try to gain coverage or else pay the full cost of the medicine. The list of covered medicines is divided into tiersThe list of medicines covered by a health insurance plan is often broken down into tiers – usually three or four. Lower tiers (Tier 1 or Tier 2) typically require co-payments, which are fixed dollar amounts, typically ranging from $10 to $50. Higher tiers (Tier 3 or Tier 4) are more likely to require coinsurance, which is a percentage of the cost of a medicine. This amount varies based on the cost of the medicine and, as a result, is harder to predict. Which tier a medicine falls under is included on a plan formulary. Also see Formulary or Drug List., which determine how much of a co-pay or coinsuranceCoinsurance is a percentage of costs a patient is responsible for paying with his or her own money (out of pocket). Health insurance plans specify what this percentage will be for a variety of health-related services, such as a specialist visit, emergency room visit or prescription medications. Because coinsurance is a percentage of total costs, it can be difficult to estimate and plan for in advance. you may have to pay out of pocket. Higher-tier medicines typically require more cost sharingThe amount insurance plans require patients to pay out of their own pockets. For example, cost sharing includes co-pays, coinsurance and deductibles. Cost sharing does not include premiums. than lower-tier medicines. Make a list of your current medicines and compare it to the plan’s formulary to make sure your needed prescriptions are covered.

2. How much will I have to pay out of pocket before my medicines are covered?

The amount you are responsible for paying out of pocket before your medicines are covered will vary based on your coverage. First, you’ll have to pay a premiumThe amount paid for health insurance coverage, usually paid monthly, quarterly or yearly. Premium payments vary based on the type of coverage and cost sharing a plan requires. Premiums do not count toward a deductible or toward the maximum out-of-pocket limit. for your coverage. This amount is usually paid monthly, but in some cases is paid quarterly or even annually, and is paid regardless of services used.

Second, you may have to meet a deductibleThe amount patients must pay annually with their own money (out of pocket) before a health plan will pay for most non-preventive health care expenses. This amount does not include premiums. For example, if a deductible is $1,000, the health plan won’t pay for most items or services until a patient pays $1,000 out of pocket. Sometimes plans exempt certain costs, such as some or all prescription drugs, from the deductible. In most cases, preventive services are covered with no cost sharing, even if you have not reached your deductible. The deductible typically resets annually. before most coverage kicks in. For example, if your deductible is $1,000, your plan may not cover most expenses until you’ve spent $1,000 out of pocket. Insurers increasingly require that a deductible be met before covering most medical or pharmacy services. Be sure to check with your insurer to know if your deductible combines these expenses to know how much you’ll have to pay before medicines are covered.

3. How much will I have to pay out of pocket for my medicines after paying my premiums and meeting my deductible?

Even after meeting your deductible, you will likely be responsible for certain out-of-pocket expenses. This may include co-pays—flat fees you are required to pay for prescriptions—or coinsurance —a percentage of the total cost of a medicine (sometimes as high as 30 or 40 percent). Check your plan’s formulary or list of covered medicines to get a sense for what you’ll need to pay out of pocket for the medicines you take.

4. Will I have to get prior approval or go through step therapy to get my medicine covered?

Sometimes, insurance plans require extra steps before covering a medicine. A plan might require step therapyHealth insurers may require patients to try certain medicines before allowing a patient to get the medicine his or her doctor originally prescribed. This is sometimes called fail first. Also see Preauthorization, Prior Authorization and Fail First. or "fail first," meaning you may have to try another medicine before your plan covers the medicine your doctor or provider originally prescribed. Plans may also require you to get permission or prior authorization before a prescription is covered. These requirements often involve additional steps for practitioners as well as patients.

5. Is my preferred pharmacy in my plan’s network?

It’s important to remember that in-network services and pharmacies are covered under an insurance plan, while out-of-network services and pharmacies may not be covered or may require higher out-of-pocket costs. Check to see if a pharmacy that is convenient for you is included in the plan’s networkA network includes the facilities, providers and suppliers that a health insurer or plan has contracted with to provide health care services to patients enrolled in their plans..