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How to Figure Out What Your Insurance Covers at the Pharmacy

Prescription drugs are more expensive now than they’ve ever been. Around two-thirds of US adults use prescription drugs, and since 2014, the prices of these drugs have risen by over 35 percent

For instance, you’ve likely heard about the high cost of insulin — the medication that helps people with diabetes survive, which costs 10 times more in the US than in other countries. Some of the other most expensive drugs for Americans include medications for complicated, painful chronic conditions like rheumatoid arthritis and Crohn’s disease. 

Every health insurance plan comes with some sort of prescription drug coverage. Understanding what you’ll pay before you get to the pharmacy counter can help you make better decisions about your healthcare and the medications you’re taking, possibly saving you money in the long run without compromising your treatment. 

Here’s how to figure out what your medications might cost you — and if they’re too pricey, what you can do about it. 


First, check your plan’s formulary.

A formulary is the list of drugs your insurance plan covers, along with what portion of drug costs you’ll have to pay. 

As new drugs frequently cycle on and off the market, formularies frequently shift. These lists usually group drugs into different tiers by cost. The higher the tier, the higher the cost of the drug. While exact details depend on your insurance plan, in general, formularies have four tiers. 

Tier 1 often includes generic drugs. Tier 2 includes more expensive generic and brand-name medications, while Tier 3 includes pricey brand-name drugs. The most expensive, coveted medications, for rare or complex conditions, get the Tier 4 spot. 

You can usually find your formulary on your plan’s website or through a quick call to your insurer. Once you find your list of covered medications, it’s important to figure out how your plan divides up costs. Some insurers have a standard co-pay based on the tier, while others cover a percentage of the drug’s cost based on its tier. 

Even before you hit up the pharmacy, you can ask prescribers if they have a real-time benefit tool in their computer system, to ensure they’re prescribing a covered drug. 


Know your deductible.

The amount of money you have to pay out of pocket before insurance benefits kick in to cover all or a portion of expenses is your deductible. 

Most plans have a combined deductible for medical expenses and prescription drugs, while others have a dedicated deductible just for medications. Your deductible resets at the beginning of the year, and you’ll pay the full cost of your medications until you meet that deductible. 


Look into prescription discount cards.

To combat wild prescription drug prices, you can look into free prescription discount cards. Pharmacies make deals with the companies that make these cards to bring in more customers in the long run — with the promise of low prices. 

Even if you don’t have insurance, you can present a prescription discount card or use an app when you pick up the medication, and the pharmacy can knock down even some astronomical drug costs right then and there. While this may feel too good to be true, it’s actually similar to negotiating with insurers yourself about provider costs, but with a lot less hassle.


Understand difference in generic vs. brand-name prescription drugs.

When you get a new prescription, ask whether it’s a generic or brand-name drug. While they’re effectively the same except for potentially different inactive ingredients like fillers, you’ll often pay more for a brand-name drug, because more money has gone into its development. 

Once a patent has expired on a brand-name drug (or the drug has lost its exclusivity), other manufacturers can produce their own less expensive versions. 

A generic medication with six or more manufacturers, for example, can cost around 95 percent less than the brand-name drug. Even a generic with only one manufacturer costs about 40 percent less than its competitor. If you’ve been taking a brand-name drug for a while, you can usually find out when generic versions become available.


Understand pharmacy price fluctuations.

To make matters even more complicated, some prescriptions might cost more or less at different pharmacies. 

That’s because when retail pharmacies order drugs, they often have an advantage over small, independent pharmacies. Big chains that purchase a certain amount of medication for thousands of stores can often get a better price from manufacturers than an independent pharmacy buying fewer doses. 

“Because the drugs are acquired at a different cost, the pharmacy can dispense them at a different cost,” says Frank North, a pharmacist and president-elect of the National Pharmaceutical Association.

Additionally, your insurance may influence which pharmacy you should turn to. Some plans will cover more drug costs if you shop at one pharmacy over another. 

Luckily, if this all sounds like too much trouble, pharmacies can usually do a real-time benefit check without actually filling a prescription. Some will even schedule an appointment with a pharmacist to help you go over costs and options without interruption. 


Stick to one pharmacist.

North suggests patients cultivate a close relationship with one pharmacy and pharmacist rather than pharmacy-hop for different medications, even if it means paying slightly higher costs. 

A pharmacist that knows you and your medication history may be more familiar with the ins and out of your insurance coverage. They can also take a close look at your menu of medications to see whether your insurance covers equally effective but less expensive options. If a certain drug isn’t covered, a pharmacist can help you find coupon programs to lower the cost.

“Talk to your pharmacist; they’re your best advocate in coordinating between you, your doctor and your insurance,” says Monét Stanford, a pharmacist and director of policy at the Association for Accessible Medicines.


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The Paper Gown, a Zocdoc-powered blog, strives to tell stories that help patients feel informed, empowered and understood. Views and opinions expressed on The Paper Gown do not necessarily reflect those of Zocdoc, Inc. Learn more.