Drug Formularies Save Money!
A drug formulary is a list of the prescription drugs that your health insurance company has agreed to cover so that when you fill your prescription, you don’t pay the full price of the medication. In most cases, formularies are comprised of drugs that are the safest, most effective, and most affordable.
How Are Drug Formularies Determined?
The medications on your health insurance company’s formulary were chosen by a third-party panel of experts known as a pharmacy and therapeutics committee. Pharmacy and therapeutic committees are made up of doctors, nurses, and pharmacists. The committee meets regularly to discuss new drugs, safety data, the results of clinical trials, and doctors’ recommendations for new drugs that may be added to the formulary. For this reason, the formulary may evolve over time as better drugs hit the market or new safety data comes out.
The health insurance company determines what these drugs will cost its customers. In most cases, the health insurance company covers a greater portion of the cost of more affordable drugs, such as generics and inexpensive brand name drugs, giving customers an incentive to opt for these over more expensive options.
How Drug Formularies Work
Drug formularies are comprised of drug tiers. Some health insurance companies only divide their formularies into four tiers while others may have as many as five or six. The tier that your medication is in determines your portion of the drug cost.
In most cases, each tier is associated with a specific co-pay, and the lower the tier, the smaller your co-pay. For example, your health insurance company may cover almost all the cost of a generic medication that is on the first tier, but you may pay a significant portion of the cost of a third- or fourth-tier drug. Sometimes Tier 6 medication costs $0. You’ll have to verify by reviewing your health plan or speaking with your broker.
Using Your Health Insurance Company’s Drug Formulary to Save Money
How much you pay at the pharmacy counter depends on your insurance plan and whether your medication is on your health insurance company’s formulary. In some cases, your primary care physician may have knowledge of your formulary or can look it up to determine what would be the most inexpensive medications they could prescribe for you. Other times, your best bet is to bring a copy of your formulary with you to doctor’s office visits.
Occasionally, health insurance companies remove a drug from the formulary. If this happens, then your insurer should provide you with written notice. This gives you an opportunity to speak with your doctor about switching to a more cost-effective medication.
Finding a Health Insurance Company that Fits Your Needs With Nevada Insurance Enrollment
Every health insurance company has its own unique drug formulary. If you are receiving treatment for a condition and you purchase individual health insurance, then finding a health insurance company that covers your prescription can help you save a lot of money. At Nevada Insurance Enrollment, our health insurance agents can help you review your needs and find the health insurance plan that will provide the best coverage.
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Recent Posts
What is a Summary of Benefits and Why Should I Read It?
A summary of benefits (SBC) is a 4-page document explaining a health insurance plan’s coverage, costs, and examples. It helps compare plans, understand costs like premiums and deductibles, and assess coverage for services like doctor visits or preventive care. Available through Nevada Health Link, the SBC is standardized for easy comparison but does not include provider networks or full exclusions. Learn how to use the SBC to choose a plan that fits your needs.
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What Is a Health Insurance Carrier?
A health insurance carrier provides plans to cover medical expenses, like doctor visits and prescription medications. Understanding your insurer’s network, plan types (HMO, PPO), and costs (premiums, deductibles) is key to choosing coverage. In Nevada, carriers collaborate with Nevada Health Link to offer ACA-compliant plans, ensuring access to preventive care and essential benefits. Learn how to select a dependable health insurance company and manage costs effectively.
What is a Prescription Drug Deductible?
In the world of health insurance, “deductible” is a common word. It refers to an amount of money that you pay out of your pocket before the insurance company begins to pay. A prescription deductible is the portion you’d pay first, then after you’ve paid the deductible, you may only have to pay a co-pay when you pick up your medication.
If you are single, you would only have to meet your prescription deductible. If you have two or more people in your family, each member may have to meet their own prescription deductible which could be up to 2 deductibles in the family. A prescription deductible is different and separate from the medical deductible, unless otherwise stated. One deductible is for medical, ie: hospitalization, doctors, etc., and the other deductible is for filling your prescriptions.