Your doctor calls in a prescription to the pharmacy. You pick it up. An entirely affordable and hassle-free transaction. How great would that be? Unfortunately, that can be easier said than done. From prior authorizations to unexpected co-pays, prescription drug plans can seem made to create confusion. A Kaiser Family Foundation health tracking poll found that almost a quarter of American adults find it difficult to afford their prescription drugs.
You can eliminate many pharmacy mishaps by picking the right drug plan from the get-go. What does a good one look like? This handy guide explains five critical components of a prescription drug plan and what to look for in order to make the best decision for you or your family.
The right plan will include all (or most) of the medications you already take. Every plan has a formulary, or preferred list of drugs, that it covers. Different plans cover different brands, variations, and formulas. For example, a plan may cover one brand of an SSRI medication to treat depression but not another. With medications that come in multiple forms, an insurer may cover the oral but not the topical. Check to make sure any plan you’re considering covers the medications you use in their current forms.
You should research whether your medicines will require a prior authorization. Prior authorization means the insurance company won’t cover the medication unless your doctor explicitly intervenes to say you need that particular medicine and explains why.
Choosing a plan whose formulary does not include your regular medications leaves you with two options: Use an alternative medication or appeal the insurance company’s decision.
Keep in mind that switching from your medication to the approved one, even between similar classes of drugs, might mean new side effects or fewer benefits. Talk to your doctor. You would not be alone. According to a CDC report, nearly 1 in 5 Americans have asked their physicians for cheaper drug options.
Many insurance plans, including Medicare, allow policyholders to appeal for coverage of a denied medicine. But the process can be lengthy, involves coordination between you and your health care team, and there is no guarantee of approval.
That’s why it’s so important to read the fine print and choose wisely upfront.
Different medications can have different co-pay structures and tiers. A good plan provides coverage that is affordable at almost every level, with low out-of-pocket costs for most, if not all, of the drugs in its formulary.
Many insurers separate medications into four categories called drug tiers. These tiers determine how much a patient will pay out of pocket. The first typically costs patients the least and requires them to use generic versions of medications. The fourth typically contains the most expensive specialty, or name-brand, medicines.
Plans require different co-pays or co-insurances in different tiers. For example, one might charge a $15 co-pay for a Tier 1 drug and $25 for a Tier 2. In the case of co-insurance, a patient might pay 10 percent of the cost of a Tier 1 drug and 20 percent with a Tier 2. And so it goes, up and up with each tier.
Different plans may also place the same medication on different tiers. That means lower or higher costs for the same medication. Choose a plan where the medications you use most are in the lowest tier, making it more cost effective.
Plans that have co-pays rather than co-insurances can make managing your health care easier. Retail prices, especially for rare specialty medications, can run high. Co-pays, which are pre-set, can provide some peace of mind about potential costs. Co-insurances can leave a lot of unknowns, particularly regarding medicines you might need in the future.
A good plan should include a no-cost or low-cost deductible, which must be met before actual coverage kicks in. Naturally the lower the deductible, the better for patients.
Be sure to look up the deductible specifically for prescriptions. If the plan has a drug deductible, research the retail cost of your medicines and estimate how many prescriptions you’d need to buy outright before coverage begins. If the plan has a high deductible, double check whether it’s a combined deductible or simply a pharmacy deductible. A combined deductible means that the money you pay for medical visits goes toward your overall deductible, which can help your prescription benefits kick in sooner.
Choose a prescription plan that gives you some freedom regarding the amount of medication you can obtain at any one time. You don’t want to run out of a drug you take daily, and might not want to run to the pharmacy every 30 days. Try to choose a plan with a flexibility quantity limit.
Check also for allowances for extended supplies. Certain plans only provide 30 days’ worth of medication and only increase that to 90 days if you use select pharmacies. In that case, make sure there is one near you.
Another hallmark of a good plan is flexible delivery options. Check if it includes home delivery, and whether the insurer has its own home Rx delivery service or pays for home delivery from pharmacies or other prescription programs.
Signs that a policy isn't right for you or going to save you money: high deductibles, co-pays or co-insurances; no home delivery options, and strict quantity limits.
The key is to pick a plan that doesn’t create more stress, financial or otherwise. Shop wisely, ask questions, consult your doctor or insurance agent if necessary, and remember to advocate for yourself and your health care needs.
Tiffany Onyejiaka, a clinic case manager who is studying for her master's in environmental health, writes about issues surrounding healthcare. She is based in the Washington, D.C. area.
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