Your health insurance plan includes a list called a formulary – a guide to the medications that are covered. If you’ve ever been baffled by how much it costs to fill a prescription, it’s possible that the drug wasn’t in your prescription booklet.
The formulary is also called the Preferred Drug List (PDL). At first glance, you might think you need a decode loop to find out. But understanding your PDL can help you pay the lowest price for the medications you need.
Make your prescriptions reasonable
Your plan list is created by a committee made up of doctors and pharmacists. The group works together to make sure the formulary is based on safety, efficacy and overall value, says Louise Norris, licensed insurance broker and analyst for healthinsurance.org.
The PDL classifies medications into levels, usually three to five, based on how much they cost you. Norris says that the level 1 drugs are the cheapest and are often generic versions of the brand-name drugs that are at higher and more expensive levels.
Your insurance plan may not cover all possible medications. It depends on whether your PDL file is open or closed.
With an open recipe bookAnd the Your health plan covers any drug approved by the Food and Drug Administration. “Any drug imaginable is at some level. The worst-case scenario is that the most expensive drugs are at the highest levels,” says Michael Botha, Ph.D., co-founder of Sesame direct-to-patient healthcare.
He says several business plans are open or very close to it.
With the formulary closed, “there are some medications that are not at any of the levels and are therefore not subject to the benefits of your medications,” Botta says.
A third of Americans use state-funded Medicaid for low-income health insurance, he says. Most of these plans have closed formulas.
Where to find your recipe book
Go to your insurance plan’s website and search for it. It might be under a tab like Find Medications or Covered Drugs. The formulary may list the medicines:
- by level
- According to the type of medicine
- Depending on the medical condition they are treating
If you can’t find the medication you’re looking for, call the number on your insurance card for information, Botta says.
“You may find that your health plan has an interactive recipe booklet page showing covered alternatives if your medication isn’t listed in the recipe book,” Norris says. It may also give you lower-level alternatives, she adds, if your medication is at a higher level.
The PDL usually includes other important information about your coverage, including:
- Prior authorization (PA), or whether your plan requires you to obtain pre-approval for drug coverage
- Progressive therapy (ST), which means you need to try cheaper medicines first to see if they work for your condition
- Quantity limits (QL), when a drug is covered only for a certain number of refill packs or for a specified number of doses per day
Most formulas change at the beginning of each calendar year. Before you order your first refill of the year, check to make sure your drugs are still on the list, if they have been replaced by generic drugs, or if new drugs you need have been added.
If you’re considering changing your health insurance plan, check to see if all of your family’s medications are in the formulary before making a decision.
Find your own recipe book to save money
It’s common to have low, fixed subscriptions for Level 1 drugs, Norris says, but coinsurance (in which you pay a percentage of the cost) for Class 1 drugs. To lower your costs, ask your doctor for a lower-grade drug, if available.
You may be wondering if generic drugs are as good as brand-name drugs. FDA-approved generics have the same ingredients and are as effective as their brand-name counterparts. It’s cheaper because it doesn’t have to repeat expensive safety and efficacy studies. There is also more competition in the market because many different generics may be available.
Be sure to share your latest brochure list with your doctor, especially if cost is a concern. Let them know you want the least expensive option that meets your needs, Botta suggests.
In some cases, you and your doctor may need to get creative. For example, an extended-release drug may not be covered while the standard version of the same drug is covered. Your doctor can write a prescription for the covered medications that you then take at different times during the day. This can mimic the effect of a drug that is released over time.
What to do if your medication is not listed in the recipe booklet
If you need a drug that isn’t on your health plan’s list, your doctor can offer you to request a formulary exception. You may need to do this for a number of reasons, Norris says.
- You are allergic to the substitutes in the recipe book.
- I’ve already tried alternatives on the PDL and it didn’t work.
- The medicines in your formulary can interact poorly with other medicines you are taking.
- Prescription medicines may cause problems due to other health conditions you have.
It usually takes a while for insurance plans to add newly approved drugs to their formulations. If your doctor thinks an entirely new drug is the best or only option for your medical needs, he or she can make a prescription exception if your health plan hasn’t started covering the new drug yet.
There is no guarantee that your insurance provider will grant a brochure exception. If not, there is an appeal process. It begins with an internal appeal. If that doesn’t work, an external appeal – a review by a third party in place of your health plan – can be resorted to.
Botha says this is an uphill battle sometimes. It is recommended to go to the website of the drug manufacturer to search for discounts. Your pharmacist can suggest ways to save, too.