Know YOUR Plan

How much do you understand about your prescription coverage? Do you know the difference between copays vs coinsurance? Understand prior authorizations? What about tiered copays? If you answered, 'No' to any of these questions, this article is especially for you.

Managed care is not a 'one size first all' (at least not as of yet). Therefore, it is important for you to understand how your healthcare benefits work, before you actually require service. A basic level of understanding will help eliminate confusion when you attempt to pick up your prescriptions. Remember your friendly neighborhood pharmacist does not know the summary of benefits for every insurance plan, so everyone must do their part to understand our personal/elected prescription plans. (Preferably before we show up to the pharmacy)

Copays vs Coinsurance: Copays generally represent a set dollar amount based on qualifying factors (type of medication, type of pharmacy). For example, your plan may charge $35 for brand name medications and $10 for generics. You may also find that your copay changes are based on whether or not your pharmacy is preferred (network vs out of network).

Co-insurance usually represents a percentage. If your co-insurance is 20% and the total amount is $100, you are responsible for paying $20 for your prescription. In most cases, generic medications are less than the brand medications, and the examples mentioned take into account that the medications are on your plan’s formulary (preferred list of medications). I encourage my patients to know their plan’s formulary based on their personal problem list. If you have high blood pressure, you should know if the medications prescribed by your provider are on your plan’s formulary. (This will save you time, money and frustration).

Prior Authorization: There are cases where your insurer wants more information on why your provider selected a specific medication before they will pay their portion of the cost. This process is called a prior authorization (or prior approval, or more affectionately known as a PA). Again, your friendly neighborhood Pharmacist does not set the rules. This request is at the sole discretion of your insurance company. Once your provider submits the required information to your insurer, a decision will be made based on the criteria (again set by the insurance company). If you meet the criteria, the request may be approved, and you will be responsible for your copay or portion of the costs. If you do not meet the criteria, the request can be denied, and you may be responsible for 100% of the costs should you decide to get the medication. As a patient, you have the right to challenge the decision of your plan (appeals, grievances, administrative hearings), but we will save that process for another discussion.

Tiered Co-Pays: Some prescription plans have medications that fall within certain levels. The higher the level, the more expensive the medication. For example, tier 1 medications are the least expensive, while tier 4 or 5 medications are the most expensive. Depending on which tier your medication falls under will determine your monetary portion. Again, it’s critical for you to understand your prescription benefits so that you are not met with surprises at the pharmacy.

This article discusses the basics of your pharmacy plan. The major takeaway is that you take responsibility and control of your healthcare by understanding your benefits, know your formulary and discuss medication choices with your provider. Remember, your friendly neighborhood Pharmacist is the medication expert, not the insurance expert!! When everyone plays their part, it can result in better healthcare outcomes for you.