There are a lot of things to consider when choosing a health plan. If you take prescription medications, you’ll also want to pay attention to which ones are included in your plan’s formulary, or list of covered medications. “Unless you’ve sat down before getting coverage and figured out whether your drugs are covered and looked at drug formularies, you may not be as protected from sticker shock as you think,” says Tasha Riggs, a licensed insurance agent based in Westminster, Colorado.

Here’s what you need to know about your plan’s list of drugs and how you can check whether your medications are covered.

What’s a drug formulary, and why is it important?

A drug formulary is just another name for the list of approved drugs that you might get through your insurance plan. And, if you take prescription drugs, having access to the ones you need is a great benefit. Depending on what type of insurance you’re getting, you may either get prescription drug coverage as part of your plan or you may have to pay for it separately. Here are some examples:

• All Affordable Care Act (ACA) plans offer prescription medication coverage
• Most employer-sponsored health plans offer prescription drug coverage
• Original Medicare does not include prescription drug coverage, but you can add a Medicare Part D plan to it that does
• Most Medicare Advantage plans (aka Medicare Part C) include prescription drug coverage
• Some short-term insurance plans offer prescription drug coverage

Each of the above plans may have its own list of approved medications. It’s important to compare the medications you take with those on your plan’s list. All medications must meet the Food and Drug Administration’s safety standards.

Even a plan that covers all your other health costs, such as doctor visits and hospital stays, may not include your prescription medications, says Riggs. That’s why it’s essential to understand your plan’s drug formulary.

What are drug formulary tiers, and how do they affect your out-of-pocket costs?

Your plan’s drug list separates prescription medications into different tiers (or categories) based on how much they cost. The tiers may be organized like this:

• Tier 1: Generic medications, which have the same active-ingredient formula as a brand-name medication but usually have the lowest out-of-pocket cost (they can run between 30% and 85% less than their brand-name equivalents)
• Tier 2: Preferred brand-name medications, which come with a higher cost
• Tier 3: Non-preferred brand-name medications, which have an even higher cost
• Tier 4: Specialty medications, which come with the highest out-of-pocket cost and are usually available only at certain pharmacies

You may be able to get some of these medications at no cost, but for others you may have to pay a copayment (flat-rate fee) or coinsurance (a percentage of the cost). Generally, the higher the tier, the higher your out-of-pocket costs.

Your plan’s drug list will also indicate:

• What’s covered in each tier
• How much of the medication is covered
• The time frame for a prescription

For instance, a plan might cover 750 milligrams of a certain medication per month, but your doctor has prescribed 1,000 milligrams. Riggs suggests talking with your pharmacist to ensure that you get what you need while still minimizing out-of-pocket costs.

Need a plan with the right drug coverage for you? Call a licensed agent at (877) 885-3208 for more information.

How might a drug formulary work in the real world?

Here’s what a formulary might look like in the real world. Say your doctor tells you about the 6 medications available to you for asthma.

• Prescriptions A, B and C are brand-name medications and have a higher out-of-pocket cost.
• Prescriptions D, E and F are generics and have the lowest copayment.

Let’s say you have Medicare Part D, and it lists the 3 generics on its drug formulary, meaning it will cover prescriptions D, E and F. But your neighbor’s Medicare Advantage plan covers prescriptions C, D and E.

That means if your neighbor is prescribed a generic or a single brand-name medication, they’ll be covered. But if you’re prescribed one of the brand-name medications, you won’t be covered unless you speak to your doctor or pharmacist about switching your medication, Riggs says.

What can you do if your prescription medication isn’t on your plan’s drug formulary?

Your doctor can submit a “prior authorization request” to your health insurance company. This form will show that a prescription medication is medically necessary, and the insurance provider may decide to cover it. As long as your doctor can deem a prescription medication medically necessary, your insurance provider can include it on your plan’s drug formulary.

Another option, if you can’t find a prescription on your drug formulary, might be to take an alternate medication. For example, if you’re doctor prescribes you a brand-name drug, you might be able to take a generic version of the drug that has the same effect. Of course, it’s always a good idea to consult your doctor before making any changes to the medications you’re taking. They can advise you if it’s a safe option.

Who else can help you understand your drug formulary?

You can tap multiple resources if you’re still having trouble figuring out how a drug formulary works and what prescription medications are covered. These include:

1. Your doctor: When your doctor prescribes you a new medication, you can ask if it’ll be covered under your plan’s formulary. If it’s not, you might want to ask about exploring that prior authorization request.
2. Your pharmacist: Your local pharmacist can walk you through what a drug formulary is and how to use it. They can also tell you if a medication is covered when you fill the prescription.
3. Your insurance company: You can call your insurance company (or visit its website) to review your drug formulary and what medications may or may not be covered.
4. Summary of benefits and mailed coverage materials: A list of the prescription medications that your plan covers may also be found in the materials your insurance company mailed you when you began coverage. That includes your summary of benefits.
5. Patient assistance programs (PAPs). Depending on your income level, you may also be eligible for patient assistance programs or PAPs, which can offer you financial assistance or provide you with free, donation-based products.

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