Dr. Mike, I recently got health insurance for the first time. Can you explain to me what a drug formulary is and what I need to know.
A drug formulary is a list of prescription drugs (both generic and brand name) that are preferred by your health plan. Your health plan may only pay for medications that are on this "preferred" list, unless your healthcare provider talks with your health plan and gets prior approval.
Health plans usually have a committee of practicing physicians and pharmacists who recommend drugs for the formulary based on the drug's quality, safety, and effectiveness. Most health plans will pay for medications that have been approved for sale by the U.S. Food and Drug Administration.
Copayments
You will need to pay a share of the cost of the prescription, a fee known as copayment. Your copayment amount will depend on what "tier" your drug is in on your health plan's formulary:
- Tier 1 drugs have the lowest copayment and usually include generic medications.
- Tier 2 drugs have a lower copayment and usually include preferred brand-name medications.
- Tier 3 drugs have the highest copayment and usually include non-preferred brand-name medications.
Talk to Your Provider
If you need a prescription, talk to your healthcare provider about prescribing a generic drug or a preferred brand-name drug if it is appropriate for your heath condition. If your provider prescribes a medication that is not on the formulary and your health plan does not approve its use, you will have to pay the full cost.
Know Your Health Plan's Formulary
Health plans have different formularies and it is important for you to understand your plan's formulary. When you enrolled in your health plan, you should have received a booklet that describes the formulary and lists all of the approved medications along with an explanation of the tier copayments.
Each year your plan should send you an update that includes any changes made in the formulary such as new drugs added to the formulary and drugs that are no longer covered. Most plans also provide access to formularies online.
If you have a choice of health plans and need medications for a chronic illness, you should look at the different formularies and choose a plan that covers your medications.
