Everything You Need to Know About Drugs Covered by Insurance
Blues Perspectives
| 3 min read
If you’re reviewing your health insurance coverage, or thinking about choosing a new plan, you may run into the term “drug list” or “drug formulary.” This is a list your health insurance company keeps that includes all covered prescription drugs, both generic and brand name. Pharmacists and doctors at Blue Cross Blue Shield of Michigan compile the list by identifying drugs that offer the greatest overall health benefit and value to you.
How it’s organized
Most of the medications on a drug list are grouped by tiers so members can easily find out if their health plan covers specific prescription medications. The least expensive and most effective drugs are in the lower tiers.
- Tier 1– Generic: Most drugs in Tier 1 are generic and have the lowest possible copayment. Drugs listed as Tier 1 are preferred because they offer the best combination of value and effectiveness. Some plans have a Tier 1A with preferred generics and a lower copay, and a Tier 1B with generic drugs with a higher copay.
- Tier 2 –Preferred Brand: Tier 2 includes non-specialty, preferred brand-name drugs that are more expensive than generics, and members pay a higher copay for them.
- Tier 3– Nonpreferred Brand: Tier 3 is made up of non-specialty, brand-name drugs for which there’s either a generic alternative or a more cost-effective, preferred brand-name drug available. Members pay a higher copay for these nonpreferred brand-name drugs.
- Tier 4– Preferred Specialty: This tier consists of specialty drugs, both generic and brand-name, that are used to treat complex health conditions. These drugs are generally more effective and less expensive than other specialty drugs.
- Tier 5– Non-preferred Specialty: Tier 5 is made up of specialty drugs that have more cost-effective generic or preferred alternatives available. Tier 5 drugs have the highest copayment.
Why you should pay attention to the tiers
Understanding the tiers in your health insurance plan’s drug list will help you more accurately anticipate how much a prescription drug may cost you. It’s also a useful tool to help you choose a health insurance plan, as you can compare one drug list against another to ensure it fits your needs. If you don’t take a lot of medications, having a more limited drug list will not present a big risk. However, if you depend on a variety of prescriptions, it may be more important to you to know if and how they will be covered by your insurance, and at what rate. Blue Cross Blue Shield of Michigan and Blue Care Network members can review their drug lists online by visiting this link: 2021 Drug Lists | Help Center | bcbsm.com. Interesting in learning more? Check out:
- How Prior Authorization Affects Your Prescription Drugs
- 5 Questions To Always Ask Your Pharmacist
- Do You Know The Two Kinds Of Drug Side Effects?
Photo credit: FatCamera
