It is a new year and for many that means they have a new prescription drug plan.
Making sense of your new coverage can be overwhelming, but if you focus on a few key points and take a few early steps, you can reduce your insurance frustrations.
Prescription drug coverage is offered as either part of a larger medical plan, or as a standalone policy. Commercial plans such as those offered by your employer or on the ACA marketplace usually have combined a medical and drug insurance policy. If you are older than 65, it is common to have a separate drug plan such as Medicare Part D or a private option.
Just like any insurance policy, different products and services are covered under different plans, so it is important to understand the differences between medical and drug insurance. For example, a meningitis vaccine is covered by a drug plan, but many times diabetic testing supplies may be covered under your medical plan. The only way to avoid the confusion is to carefully read your insurance policies or consult with your local pharmacy.
When researching your policy, the very first thing you want to do is to read the formulary and verify your deductible and co-pays, if any. The formulary is the list of medications that is covered by your insurance plan. They are separated out into tiers based on coverage and cost. Expensive and brand name medicines are usually in the highest tiers and generics are in the cheaper tiers. They also will normally tell you if you need prior authorization or if your medicine has any dispensary restrictions. Formularies can help you figure out what plan is best for you. They can also help you discuss cheaper alternatives of your prescription with your doctor.
Deductibles and Co-pays
Many times the policyholder is required to spend a certain amount of out-of-pocket money before the insurance kicks in to cover the medicine (referred to as a deductible). Not paying attention to the deductible can make many people believe particular medications aren’t covered under their policy, but once the deductible is met, then the insurance company pays their portion for the rest of the year or until the maximum benefit amount is reached.
Some other plans use a co-pay system for prescription drugs. These plans can be more convenient for those on a budget or if your medicine is very expensive. Co-pays are based on the tier of the drug in the formulary. These costs typically range from $15-$75 per refill depending on your plan and formulary.
Sometimes, a health plan might utilize both copayments and coinsurance for prescription drugs. For example, while the first two or three tiers of drugs require a copay, the fourth tier would switch to coinsurance. The health insurer does this to limit financial risk, putting a larger responsibility of the cost of the expensive drug back onto the patient.
Avoid the Mistakes
Now that you are familiar with your insurance plan, here are a few tips to avoid last minute snafus:
- Make sure your pharmacist is still in your network. Using an out of network pharmacy can really cost you. If you are not sure, then take your new insurance card to the pharmacist and let them check. This will save you time when you go to have your medicine filled.
- Try to refill any existing medications with the new plan before you run out. This will give you plenty of time to work with your doctor and the pharmacy to decide the best course of action if your medicine is not covered or is too expensive.
- Keep in mind that your deductible isn’t going anywhere. It makes you responsible for that amount of the drug cost in one way or another. In the end, no money is saved by postponing an essential medicine.
- The pharmacy probably knows more about your plan than you do. They are very familiar with insurance claims and plans. Don’t be afraid to utilize them as a resource for insurance-related questions and reducing medical costs.
The most important part of any insurance plan is your understanding of how to make it work for you. Fortunately, there are people that can help! Your benefits administrator at work, your doctor, your pharmacist, and your third party benefits administrator can all help you find the answers you need and keep you healthy.