Prescription Drug Formularies and Tiers Explained
The source provides an overview of prescription drug formularies and tiers within health insurance plans, explaining how these structures impact patient costs. A formulary is defined as the list of covered medications, which are often organized into different tiers based on cost-effectiveness and clinical value. Generally, lower tiers include generic drugs with the lowest out-of-pocket costs, while higher tiers consist of more expensive brand-name and specialty medications that result in higher copayments or coinsurance. The text illustrates examples of common three-tier, four-tier, and five-tier systems, noting that some plans also require prior authorization or step therapy for certain drugs. Ultimately, understanding the plan’s formulary is essential for managing healthcare expenses and making informed decisions about prescriptions.
