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Prescription Drugs and Your Health Plan: What Is Covered and What Isn’t
A recent poll found that 44% of Americans went without at least one prescribed medication. They reported they could not afford it and felt forced to focus on other necessities. Many times the prescription drug they went without was essential to their health and wellbeing.
With so many hard-working families needing to choose between their health and the rest of their lives, understanding your health plan is essential. This knowledge can help you advocate for yourself, which is increasingly necessary with individual health insurance plans.
In fact, a study in 2018 found a link between self-advocating and a higher sense of self-compassion and satisfaction in your healthcare experience.
One way to empower yourself is to be knowledgeable about the ins and outs of your healthcare plan. Read on to learn more about what is (and is not) covered.
Understanding Your Formulary
A “formulary” is a fancy word for a list of drugs that an insurance plan covers. When someone signs up for health insurance they are usually sent a large packet of information along with it. If you still have yours, flip through it to find the formulary or “drug list.”
Misplaced your introductory packet? You can contact your insurance company for a replacement. You can also see if they have an online copy through their website.
Every insurance plan will have a different looking drug list, but there are a few key terms to look for and understand:
You’ll hear this term often but might not be sure what it means. A “tier” is a classification for prescription drugs that puts them into categories of commonality. The higher the tier, the harder the drug is to find (and pay for.)
The lower the tier, the more likely it is that your insurance might cover it.
The lowest and most common is tier 1. These medications will always be the generic form of other, higher tier ones, and will have the lowest co-payment. For example, Captopril for cardiovascular disease is a generic form of Capoten.
Brand name drugs will usually start at tier 2. They, along with the drugs in tier 3, come with a higher co-pay. You may also find drugs listed in tier 3 that have generic versions available, so keep an eye out.
An example of a common tier 2 medication is the statin Lipitor. For the same example of cardiovascular disease, you might find a drug like Vasotec listed in tier 3. Vasotec also has a generic form called Enalapril which you might be able to request instead.
Tier 4 is the highest class, consisting of drugs that physicians consider “non-preferred.” That term can be a bit misleading. Drugs in this tier are often newer, brand name, and very expensive.
If you find your drug in this tier you’ll have to pay much more at the pharmacy to access it.
Another important thing to learn is how much your deductible is. A “deductible” means how much you’ll pay out of pocket before your insurance starts to foot the bill. You may have a general deductible for all medical expenses, or a separate medical and prescription drug deductible.
If your prescribed drug isn’t covered it is important to know how much they want you to pay upfront.
Your plan’s formulary may have special initials next to a listed drug. There are a lot of them, but a few important ones to know are “PA”, “ST”, and “QL.”
PA means that your insurance company will need prior authorization from your doctor. This usually means emailing or faxing a note straight from the doctor’s office to your insurance company. You’ll often see this abbreviation next to drugs that have a higher abuse rate, or more dangerous side effects.
ST stands for “step therapy.” If you see this abbreviation next to your preferred drug, it means your insurance company will need you to try a generic medication first. You’ll need to gradually “step up” to the higher tiered medication with your doctor’s help.
Finally, there is the abbreviation QL or “quantity limit.” This one seems fairly self-explanatory; there will be a limit on how much of your preferred drug you can fill in a certain period. But each plan may disagree on which drugs they should limit in quantity or not.
It’s up to a plan’s discretion to decide how much of a drug to allow at once. Just like prior authorization drugs, you’ll most often see QL next to riskier medications like opioids.
Health Plan Metal Levels
Millions of Americans have signed up for the Affordable Care Act (or “Obamacare”) as their source of health insurance. How much you’ll pay for prescription drugs depends on the type of metal associated with the plan.
ACA plans come in bronze, silver, gold, and platinum. Bronze plans are high deductible health plans but offer the lowest monthly payment. This type of plan comes in handy if you don’t have a great deal of money to spare each month, but are generally healthy.
Paying for prescription drugs on a bronze level ACA plan can be tricky since, even if they offer coverage, you may still have to meet the deductible first. That means paying the full cost of whatever you need.
Silver, gold, and platinum gradually increase the amount you pay per month but decrease your deductible in turn. If you can afford it, you may have no deductible at all.
If you’ve got insurance from an employer they’ll have their own levels of coverage. You can check with them to see the differences. They often follow the same vein of higher deductible means lower monthly payments.
“Covered” but Not Covered
In some cases, a drug may have coverage but only be partially paid for by that coverage. Your insurance plan may need you to pay a percentage of the cost rather than a flat co-pay based on what tier it falls under. (This is often the case for specialty drugs that you might find in tier 4.)
Let’s take for example a drug called Harvoni. This is a specialty drug normally used to treat hepatitis C. A patient takes one tablet daily for a course of 12 weeks.
It sounds simple, except for the fact that a 12-week treatment course of this drug comes with a sticker price of 94,500 dollars.
In 2018 more than a third of people taking Harvoni faced denial by their insurance companies. This left them with the full cost of the drug.
But even if they weren’t denied, the average “bronze” plan under the Affordable Care Act requires the member to pay 6.7% of the drug’s cost. It might not seem like much, but this percentage is for specialty drugs used in rarer cases. Other drugs under a bronze plan would have a flat co-pay if covered, usually 5 to 75 dollars depending on the drug and brand.
In our Harvoni example, the member would be shelling out $6,373 dollars.
That would likely wipe out their deductible for the rest of the year, but few people have that kind of cash lying around.
Common Drugs Not Covered by Medicare
Private insurance companies craft their own lists of covered and not covered drugs. Medicare, a program that provides partial medical/hospital coverage for anyone over the age of 65, offers a variety of coverage options as well.
Medicare part D is a subsection of coverage relegated to only prescription drugs. You’ll have the option of buying part D from many different companies, who all craft their own drug lists. They have very defined rules on what they will and will not cover.
They tend to follow the same route of preferring generic but, regardless of brand name, some types of medication are not allowed:
- Drugs that treat erectile dysfunction.
- Fertility promoting drugs.
- Drugs that assist in weight loss or weight gain. (Usually used to treat eating disorders.)
- Common prescription cosmetic products like Renova.
- Drugs that are often used for cold and flu, like Phenergan with Codeine
It’s especially ironic that erectile dysfunction drugs aren’t covered, since seniors are at the highest risk for this type of problem.
If Medicare part D doesn’t cover your prescription or you realize that you’ll be paying high costs despite coverage, you have the option of combining insurance plans. This means you can hold private insurance along with Medicare part D.
The pharmacy will bill your primary insurance first, then go on to the secondary. Medicare part D can count as your primary or secondary depending on a few extenuating factors.
Still, Medicare part D still requires a monthly payment. The secondary insurance that many rely on to help pay the costs of their drugs also costs a monthly payment. For many, this is not only confusing to navigate and choose between, but also out of their reach financially.
Complications From Drug Denial
Prescription drugs that often face denial are brand name drugs. (Think Ventolin HFA denied in favor of albuterol sulfate for asthma.) Generic medication might work as well for your particular situation, of course. You should always seek a generic equal if you cannot access the name brand.
But while many generic brands are enough, some have added ingredients that many people react badly to. Furthermore, switching to a generic drug isn’t always easy. Some generic versions, like devices prescribed for asthma, come with slightly different instructions.
Sometimes the new drug will have completely different instructions for use.
This might mean you’ll need another appointment with your doctor to explain it. It can also lead to confusion and create problems for both the patient and the doctor. So your situation may necessitate a certain brand name recommended by your doctor and backed by your own personal health experience.
What Happens After Denial
It’s always frustrating when you receive a denial letter from your insurance company. Many people aren’t sure what to do next and simply think they need to pay out of pocket. This can result in payments that are hundreds (or even thousands) more than they should be.
As discussed above, one option is to see if you can get a generic brand instead. But when that isn’t possible or preferred, you have the option of appealing the insurance company’s decision. Many denials are simply requests for more information, and you can write a letter better explaining your situation.
Explain why you and your doctor feel you need this medication and why others haven’t worked for you.
Sometimes that isn’t enough though. The insurance company may write you back (taking more days out of your time) and say they require a note from your doctor as well.
A senior whose main form of insurance is Medicare may wait up to three days for an answer back about their determination. Those on Medicare are often most at risk for complications as a result of running out of their prescribed medication.
Other Options for Coverage
What is considered covered or not covered by a health plan can be confusing and frustrating to figure out. With so many different drug lists for individual health insurance plans, Medicare plans, Medigap supplement plans, and insurance through the ACA Marketplace, it’s nearly impossible to provide one universal list.
But there are a few common threads that we can take away. Number one is that generic brands are preferable (if not always desirable.) Number two is that there is no guarantee that your company will cover the medication you need.
A big part of feeling satisfied with your health care is to be as informed as possible about the options available to you–both within your plan and outside of it.
If you’ve received a prescription from your doctor and aren’t sure whether your insurance company will cover it, we may be able to help! We have an extensive selection of brand name and generic medications that may even be cheaper than what you’d pay with insurance.
Advocating for what is best for you within your health plan requires the right information and the best resources. Contact us to start taking charge of your own health without the confusion and worry of the insurance companies.