Prescription Insurance

Prescription insurance often referred to as a prescription drug plan, is an insurance policy covering all or part of the cost of prescription medications. These are available separately or sometimes included as part of a health benefits package. Prescription coverage is also available for those who qualify through the Medicare Prescription Plan.

Prescription coverage has been the fastest-growing cost in healthcare.  Some new drugs do wonders but have exorbitant prices.  It’s not unusual for a prescription to cost $10, $100, or even $1000 a day.

prescription containerMost plans include a Formulary or list of approved drugs. In some plans, only drugs on the Formulary list will be covered (known as a Closed Formulary). Other plans might cover non-formulary drugs only with precertification or at a lower rate.

Many prescription insurance plans now include a tiered formulary, with some drugs, usually the lower-cost generics, having the lowest copayment/coinsurance amount and additional tiers at higher copayment/coinsurance amounts.  In many cases, the lower-cost generics do the job, and its higher-price brand name and insurance companies will encourage you to use the lower-cost one by charging you a lot less.  Unfortunately, most newer drugs will not have a generic equivalent and can be expensive.

There have been a lot of ads on TV lately for prescription drug discount cards. Don’t confuse these with insurance. While they are better than nothing and might give you a price break on some well-known prescriptions, they’re not insurance and don’t pay any part of the bill. In fact, most receive payments from some drug companies for your purchases.

There have also been ads on TV lately for free or subsidized drug programs from some major manufacturers. Most have income guidelines and are worth investigating if you qualify.

Most insurance plans have “in network” pharmacies for prescription insurance contracted to provide lower prices.  Check your plan to find the lowest-cost pharmacies.  Many also offer mail-order pharmacies with additional discounts over the pharmacies.

Don’t be taken in by ads from Canadian (most aren’t really Canadian) or offshore pharmacies.  It’s actually illegal to have prescription drugs mailed to you, but that’s not the biggest problem.  Most of these pharmacies mail drugs from countries that have little or no regulation and, at best, maybe counterfeit, altered, or outdated.  There have been many instances of harmful or even addictive drug substitutions.  Don’t even think about using this type of mail-order dealer.  It’s too dangerous.

Prescription Discount Cards

Several companies offer prescription discount cards.  These are not insurance companies.  They work with Pharmacy Benefit Managers to obtain discounts on some medications.  The final cost can sometimes be below insurance rates.