Everything You Need to Know About Drug Formularies

Everything You Need to Know About Drug Formularies

 

You might think the phrase “drug formulary” or “drug list” refers to the ingredients that go into a medication, but it is actually a list your health insurance company keeps that includes all covered prescription drugs, both generic and brand name. The Blue Cross Blue Shield of Michigan drug list is put together by our pharmacists and doctors to identify drugs that offer the greatest overall health benefits and value. Here’s more about how the list is used:

How it’s organized:

Most of the medications on a formulary are grouped by tiers so member can easily find out if their health plan covers specific prescription.  The least expensive and most effective drugs are in the lower tiers.

  • Tier 1Generic: 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.
  • Tier 2 Preferred Brand: Tier 2 includes brand-name drugs that don’t have a generic option. These brand-name drugs are more expensive than generics.
  • Tier 3Non-preferred Brand: Tier 3 is made up of brand name drugs that do have generic options. Since there are more cost-effective alternatives available for these drugs, you’ll have higher copayments or the drugs may not be covered.
  • Tier 4Preferred Specialty: This tier consists of specialty drugs, both generic and brand name, that are used to treat difficult health conditions. These drugs are generally more effective and less expensive than other specialty drugs.
  • Tier 5Non-preferred Specialty: Tier 5 is made up of specialty drugs that likely have a more cost-effective generic or preferred alternative available. Tier 5 drugs have the highest copayment.

Why you should pay attention to Tiers:

It’s important to know how to access your plan’s drug formulary, especially if you take medications on a regular basis. Understanding your formulary will help you accurately anticipate how much a drug will cost you. To see what formularies fall under your plan check out the 2016 drug lists.

Before choosing a health insurance plan, make sure to review the drug formulary to be sure it fits your needs. If you’re someone who doesn’t take a lot of medications, having a lower priced plan with a more limited drug formulary will not present a big risk. On the other hand, if you’re someone with multiple medical issues who depends on a variety of prescriptions, you need to know whether or not they will be covered and at what rate.

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Photo credit: Jamie

 

 

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