The Mystery of Using Prescription Drug Benefits
We’ve seen major marketing campaigns promoting new (and expensive) medications that offer improved results in treating a difficult medical condition. Health insurance plans have adopted a variety of strategies to manage costs while trying to provide adequate access to the most effective medicines.
A health insurance company can manage their own pharmacy benefits or hire another company as their PBM (Pharmacy Benefit Manager). The health insurance company and the PBM agree to a “Formulary” of medications that will be used. A formulary is a list of medications that are covered by an insurance plan. The medications are categorized by Tier. This is an example of typical definitions.
Tier 1—Preferred generic drugs
Tier 2—Non-Preferred generic drugs
Tier 3—Preferred name brand drugs
Tier 4—Non-Preferred name brand drugs
Tier 5—Specialty drugs
Generics vs. Name Brand Drugs: Prescription drug benefits are designed to strongly encourage the use of generic medications by pricing them much lower than name brands. Some medications do not have a generic equivalent. There are also situations where an individual doesn’t respond well to a generic and needs to use the name brand product.
Prior Authorization: Some drugs will only be covered by insurance if the medication is “pre-authorized” before you try to pick it up at the pharmacy. This usually involves having your doctor provide information to the PBM that explains why it is “medically necessary.”
Quantity Limits: Many formularies limit the number of pills such as Pain meds and narcotics that a pharmacy can dispense in a 30-day period. If you need more than is allowed, your doctor will have to request an “override” that will be only be active for a limited duration of time.
Step Therapy: Some drugs will be approved for use only after less expensive or safer medications have been tried without satisfactory results. Once again, your doctor must be involved in asking for approval.
Medication Not Included on the Formulary: First, confirm with the PBM that the drug is not on the formulary. Second, ask your doctor to request an “exception” to the formulary by providing medical information that establishes your need to use it. If the exception is approved, you will be able to use your insurance towards payment. If the exception is declined, then seek assistance from the drug manufacturer. Many medications have discount programs available when it is not covered by insurance.
Good RX and Blink Health: These organizations have websites and apps that offer discounts and compare medication costs.