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Why is Your Plan’s Drug Formulary Important to You?
There are three big reasons you need to know what’s contained in your plan’s formulary. The first is so you know what medications and pharmaceutical treatments are covered by your insurance benefits. The second is so you can determine how much those drugs are going to cost you. Thirdly, you’ll want to know upfront if your medication requires any special treatment or paperwork before visiting the pharmacy.
Knowing what drugs are covered
Your drug formulary will give you a complete list of every drug covered by your plan and how it is covered within your cost structure. With this information you can be more aware of costs and what to expect when you pick up your medication. It also can help you budget and balance your healthcare costs. In addition, during plan enrollment, this information is key to making an informed decision about which health plan option is best for you based on your medical needs. If you know that you will need a certain medication, you can compare several competing drug formularies to choose a plan where that drug is covered.
Knowing how much you’ll pay
It’s also important for you to know how much each drug will cost you under you benefits plan coverage. Your drug formulary will place each drug into specific tier that you then match with your list of copayments and co-insurance for that tier. For example, a generic drug listed under Tier 1 may mean you have a $20 copayment at pickup. While a preferred name-brand drug under Tier 1 could mean a $40 copayment. Depending on your actual drug coverage, each medication will require you to pay for your prescriptions with a copayment or coinsurance amount to take the medication home. Co-payment is a flat-dollar amount, similar to the example discussed above. If your plan uses co-insurance then your costs are a percentage of the total cost the pharmacy has for the drug.
Find out if there are any special requirements for coverage
In addition to showing the tier of the medication, the formulary will also show whether that drug has any special conditions attached to it. For example, your medication may require a prior authorization form to be submitted to the insurer by your doctor before it will be covered. Quantity limits, limitations on which pharmacy can fill the prescription, including mail-order or specialty pharmacies, or generic-only coverage are all situations that can be found within your formulary document.