If you have prescription drug coverage, you may be familiar with your plan's formulary, which identifies all of the medications covered under your plan. Your plan may also divide its formulary into several different tiers. You might be wondering what these seperate tiers mean.
Prescription drug formulary tiers group different medications together by the level of coverage provided for each. Most formularies use 3 or 4 different tier groupings. For example, a 3-tier plan might have one tier with a $10 copay for generics, another tier with a $25 copay for preferred brand-name medications, and a third tier with a $50 for non-preferred brand-name medications. Your plan decides which drugs are included in each tier.
These different tiers provide a financial incentive for doctors and patients to choose less expensive medication that has been proven to be effective. This helps the plan contain costs. However, it can be more difficult for patients to pay for their medication if they experience adverse reactions when taking a drug from a lower tier, or cannot use the less expensive medication for any reason.
