After familiarizing yourself with each of these important terms, choose your health insurance type at the top of the page to see more detailed information on how to navigate and register for a plan.
What is a formulary?
A formulary is a list of generic and brand name medications that your health-insurance plan covers. Insurance companies determine formularies by assessing the overall value of medications. Each insurance company has their own formulary so make sure you check to see if your medications are on the plan’s formulary before choosing your insurance plan.
For example, if a plan has your specialty medication for your chronic condition on their formulary, the cost for that medication would be cheaper compared to a plan that did not have your specialty medication on their formulary.
Tiers are different levels of medications on a formulary that insurance companies create. The cost is determined based on the tier where the medication is found. Usually, there are 3 to 4 tiers with the 1st tier as the most inexpensive option:
Tier 1 usually includes generic medications.
Tier 2 usually includes preferred brand name medications
Tier 3 usually includes non-preferred brand name medications
Tier 4 usually includes specialty medications
For example, let’s say you take a brand name medication for your chronic condition. Compare different plans to see if this medication falls under Tier 2 or Tier 3 on formularies. If it falls in Tier 2 on Plan A’s formulary and Tier 3 on Plan B’s formulary, Plan A would be the cheaper option.
When you use your insurance for health care, your plan’s deductible, copayment, coinsurance, and out-of-pocket maximum come into play so it’s important to understand what each of these mean
The amount you pay for your health insurance each month is called the premium, this is paid every month even if you don’t go to the doctor.
For example, if your premium is $150, you will pay a flat $150 every month.
A deductible is an amount you have to pay before your insurance starts to pay.
For example, if your deductible is $1,500, you will need to pay $1,500 in health care expenses before your insurance coverage kicks in. If you have not met your $1,500 deductible yet, you will need to pay the full amount if you need health care services up until you reach $1,500.
A co-payment is a fixed payment you have to pay for specific health care services.
For example, if you have a copayment of $30 for doctor’s visits, you will be charged $30 at every doctor’s visit. You may have different co-payment amounts for office visits, prescription drugs, and other types of care depending on your plan.
Co-insurance is what you pay after you meet your deductible (usually a percentage of the total cost of a medication or a health -care visit)
For example, if your co-insurance is 20% and your doctor’s visit costs $100 (and you have already met your deductible), you will need to pay $20 (20% of the total cost). Your insurance company will cover the rest.
The out-of-pocket maximum is the most you will pay out-of-pocket during the year. Once you’ve paid this amount, your insurance will pay for everything at 100%. Out-of-pocket costs include copayments, coinsurance, and deductibles.
For example, if your out-of-pocket limit is $7,000 and your out-of-pocket medical expenses reach this amount, your insurance company will cover all of the costs above $7,000.
Pay special attention if your medication has a Prior Authorization label next to it or if your plan specifies that prior authorization is required for certain medications. If it does, your health-care provider will have to fax a request to the insurance company for approval before you can pick it up from the pharmacy.
If your doctor prescribes you a necessary specialty medication for your chronic illness, you may need to wait for the authorization for an extended period of time before beginning treatment which is burdensome and can lead to delayed treatment and prolonged illness.
Join the 50-State-Network to find out more about Prior Authorization and what you can do to advocate for a more streamlined approach
These health insurance programs are used against people who use drug co-pay cards (cards usually given by the manufacturer) by not counting the payment that these cards assist with, towards the final deductible set by the insurance company.
For example, if the copay card has a $6,000 limit and the deductible is $6,000, after the limit has been met using the co-pay card, you would still have to pay $6,000 out-of-pocket because none of this counted towards the deductible.
The BEST way to currently prevent this from happening is by calling the insurance company BEFORE you contract with them and get it in writing that they will accept the copay card as part of your deductible.
Join the 50-State-Network to find out more about Accumulator Adjuster Programs and what you can do to prevent this.