Donât Assume Your Prescription Is Covered
Youâre prescribed a new medication. Itâs essential. You pick it up at the pharmacy, hand over your card, and get hit with a bill thatâs way higher than expected. This happens to thousands of people every year-not because they made a mistake, but because they never asked the right questions about their insurance.
Prescription drug coverage isnât a simple yes or no. Itâs a maze of tiers, copays, deductibles, prior authorizations, and pharmacy networks. Even if your plan says it covers prescriptions, that doesnât mean your prescriptions are covered at a price you can afford.
According to CMS data, 63% of people enrolled in Marketplace plans in 2022 didnât check if their specific drugs were covered until after they signed up. By then, it was too late. Nearly 3 in 10 had to switch plans the next year just to get their meds at a reasonable cost.
Whatâs in Your Formulary?
Your planâs formulary is the official list of drugs it covers. But hereâs the catch: not all drugs are treated the same. Most plans organize drugs into four tiers, each with a different cost to you.
- Tier 1: Generic drugs - Usually under $10 per prescription. These are the cheapest and most commonly covered.
- Tier 2: Preferred brand-name drugs - Around $40. These are brand-name medications your plan has negotiated lower prices for.
- Tier 3: Non-preferred brand-name drugs - Often $100 or more. These are brand-name drugs your plan doesnât push, usually because cheaper alternatives exist.
- Tier 4: Specialty drugs - These can cost hundreds or even thousands. You might pay 25-33% coinsurance. For a $5,000 monthly drug, thatâs $1,250 out of pocket.
Just because your drug is on the formulary doesnât mean itâs in the right tier. A drug youâve been taking for years might suddenly move to Tier 3 or get removed entirely. Always verify the tier-not just the presence-of your medication.
How Much Will You Pay Before Coverage Starts?
Many plans have a deductible for prescriptions. That means you pay 100% of your drug costs until you hit that number.
On Bronze Marketplace plans, the average prescription deductible is $6,000. Thatâs not a typo. If you need a $1,200 monthly insulin shot, youâd pay $14,400 in a year before your insurance kicks in. Thatâs impossible for most people.
Gold and Platinum plans have much lower deductibles-sometimes as low as $150. If you take multiple prescriptions, paying a higher monthly premium might save you thousands annually. CMS modeling shows someone on 12 maintenance medications saves $1,842 per year on a Gold plan versus a Bronze one.
Ask: âWhatâs the prescription deductible? Is it separate from my medical deductible?â Many plans combine them. Others keep them separate. That changes everything.
Are My Specific Drugs Covered?
This is the most important question. Not âDo you cover prescriptions?â but âDo you cover my prescriptions?â
Use your planâs online tool. Enter your exact drug names, dosages, and frequency. Donât guess. Donât rely on what your doctor says. Doctors donât know your insuranceâs formulary.
For example: One user on Reddit thought their $4,200/month specialty drug was covered under Tier 4. Their Silver plan had a $500 copay maximum. They got billed $3,700 at the pharmacy. No one warned them.
Medicare Part D beneficiaries face the same issue. In 2023, 32% switched plans because their meds werenât covered as expected. The biggest surprise? Prior authorization requirements. Nearly 60% of those who switched cited unexpected prior auth rules as their reason.
Do I Need Prior Authorization or Step Therapy?
Prior authorization means your doctor has to get approval from your insurer before the drug is covered. Itâs common for specialty drugs, high-cost brand names, or drugs with cheaper alternatives.
Step therapy means you have to try a cheaper drug first-often one that doesnât work as well for you-before your plan will pay for the one your doctor prescribed.
For chronic conditions like rheumatoid arthritis, multiple sclerosis, or diabetes, step therapy can delay effective treatment. One study found 37% of Marketplace plans use step therapy for specialty drugs. Ask your insurer: âDoes this drug require prior authorization or step therapy?â
If youâre denied, you can appeal. But that takes time. If youâre already running low on meds, you canât wait weeks.
Which Pharmacies Are In-Network?
Your plan might cover your drug-but only if you fill it at a specific pharmacy. Around 78% of Marketplace plans restrict coverage to in-network pharmacies.
Out-of-network pharmacies can cost 37% more. Thatâs not just a little extra. For a $200 monthly drug, thatâs $74 extra per month. $888 a year.
Check your planâs pharmacy network. Look for your local CVS, Walgreens, or independent pharmacy. Call them. Ask: âDo you accept [Plan Name]?â Donât trust the website. Networks change.
Medicare Advantage plans are especially strict. 68% use tiered pharmacy networks. Standalone Part D plans are slightly more flexible, but still have limits.
Whatâs the Out-of-Pocket Maximum?
This is the most youâll pay in a year for covered services-including prescriptions. After you hit it, your plan pays 100%.
On Bronze plans, the max is $9,450. On Platinum plans, itâs $3,050. If you take expensive drugs, a higher premium with a lower out-of-pocket max is often smarter.
Example: Someone on a $2,500/month specialty drug would hit the Bronze planâs max after paying $9,450. Thatâs just four months of meds. After that, theyâre covered. But those first four months could cost them $10,000. A Platinum plan with a $3,050 max? They hit it after just one month.
Ask: âWhatâs the total out-of-pocket maximum for prescriptions? Is it combined with medical costs?â
How Does Medicare Part D Work?
If youâre on Medicare, you have two choices: standalone Part D or a Medicare Advantage plan with drug coverage.
Standalone Part D plans let you pick any doctor and hospital, but you pay extra for drug coverage. In 2023, the average monthly premium was $34.70, and 83% had a deductible.
Medicare Advantage plans bundle medical and drug coverage. Premiums are often lower, but pharmacy networks are tighter. 68% use tiered networks versus 42% of standalone Part D plans.
Hereâs whatâs changing in 2025: The âdonut holeâ is disappearing. Youâll pay 25% of drug costs until you hit $8,000 total spending, then catastrophic coverage kicks in. Plus, insulin will cost no more than $35 per month.
Also, starting in 2025, your total out-of-pocket drug costs will be capped at $2,000 per year. Thatâs a game-changer for people on expensive medications.
When Should You Review Your Coverage?
Open enrollment is your only chance to switch plans without a qualifying life event.
- Marketplace plans: November 1 to January 15. Use HealthCare.govâs plan comparison tool. Enter up to 15 medications and three pharmacies.
- Medicare Part D: October 15 to December 7. Use Medicare.govâs Plan Finder. Enter drugs by NDC code-not brand name-for accuracy.
Donât wait until your prescription runs out. Spend 20 minutes now. People who do save an average of $1,147 per year.
What to Do If Your Drug Isnât Covered
If your medication isnât on the formulary, or itâs in a high tier:
- Ask your doctor for a generic or preferred brand alternative.
- Request a formulary exception. Submit a letter from your doctor explaining why the drug is medically necessary.
- Check patient assistance programs. Drug manufacturers often offer discounts or free meds to low-income patients.
- Use GoodRx or SingleCare for cash prices. Sometimes theyâre cheaper than your insurance copay.
One user saved $8,400 a year by switching to a Gold plan after checking her insulin coverage. The $200 higher premium was worth it. She didnât guess. She checked.
Final Checklist Before You Enroll
Before you sign up for any plan, answer these five questions:
- Is my exact medication on the formulary, and what tier is it in?
- Whatâs the prescription deductible? Is it separate from my medical deductible?
- Do I need prior authorization or step therapy for my drugs?
- Is my pharmacy in-network? Whatâs the cost difference if I go out-of-network?
- Whatâs the out-of-pocket maximum for prescriptions?
If you canât answer all five, donât enroll. Wait. Call your insurer. Ask for a written copy of the formulary. Save it.
Prescription drugs arenât optional. For millions, theyâre life or death. Donât let insurance paperwork decide your health.
Are all prescription drugs covered by insurance?
No. Insurance plans only cover drugs on their formulary, and even then, coverage varies by tier. Some drugs require prior authorization, step therapy, or are excluded entirely. Always check your specific medications before enrolling.
What if my drug isnât on the formulary?
You can request a formulary exception by submitting a letter from your doctor explaining why the drug is medically necessary. You can also ask your doctor for an alternative drug on the formulary. Some manufacturers offer patient assistance programs to help with costs.
How do I find out if my pharmacy is in-network?
Visit your insurerâs website and search their pharmacy network directory. Call your pharmacy directly and ask if they accept your plan. Donât rely on online tools alone-networks change frequently.
Whatâs the difference between a copay and coinsurance for prescriptions?
A copay is a fixed amount you pay per prescription-like $10 or $40. Coinsurance is a percentage of the drugâs cost-like 25% or 33%. Specialty drugs usually have coinsurance, which can make them much more expensive than drugs with a flat copay.
When can I change my prescription drug plan?
You can change during Open Enrollment: November 1 to January 15 for Marketplace plans, and October 15 to December 7 for Medicare Part D. Outside those windows, you can only switch if you have a qualifying life event, like moving or losing other coverage.
Will Medicareâs new $2,000 cap affect my drug costs in 2025?
Yes. Starting in 2025, Medicare Part D beneficiaries will pay no more than $2,000 out of pocket for prescription drugs each year. This cap applies to all drugs, including specialty medications. It also eliminates the coverage gap (donut hole) and caps insulin at $35 per month.
Whatâs Next?
If youâre still unsure, call your insurerâs member services. Have your drug list ready. Ask for a written copy of the formulary. Save the conversation.
Next yearâs enrollment starts in November. Donât wait until youâre out of meds to act. Take 20 minutes now. It could save you thousands.
