Health Insurance Articles
Understanding The Formulary On Your Health Insurance Plan
2010-08-19
Everyone should know what a formulary is and how it relates to your health insurance coverage these days. Not having an understanding of the working of a formulary can really hit someone where it hurts, right in the wallet. Do not stay in the dark any longer-learn to understand the nuances of a formulary right now.
What exactly is a formulary? A formulary is the list of approved medications for a health care company. The costs and the amount of co-pay that will be necessary to cover these drugs will depend on whether the medication is on the insurance company's "formulary list." These lists are pretty standard. If you have a major medical condition, or even most minor ones, a form of medication for your needs is highly likely to be on most formulary lists. If someone has specific medical needs and wants to know if their medication is covered, most insurance companies formulary lists are online, and it is easy to check to see if the medication is on the list or not.
How does the presence of a drug on the formulary list affect price. The first concept a person needs to understand is the concept of co-pay. Co-pay is the amount that a person will need to pay for his medication along with the insurance company. For example, with a $5 co-pay, the patient will always pay $5 for the drug. The second concept someone must grasp is the idea of tiers. Health insurance coverage is offered in graduated systems of tiers, starting with plans that will be the least expensive to the customer and then moving up to the most expensive. One thing people must understand is that the tier of prescription medication is entirely up to you.
How do the tiers work? The least expensive tier is generic drugs. These will always have the lowest co-pay and the highest percent of coverage. Most often, all a patient will pay for these drugs is the co-pay. Then, there are the name brands that are on the formulary list. Finally, you get drugs that are not on the formulary list; these drugs will be the most expensive to the user, having the highest co-pay and the lowest percent of coverage.
Thus, when looking for health insurance, it is wise to make sure that your drug of choice is on the formulary list or has a generic equivalent if you wish to save yourself some money. The formulary for most health insurance coverage is online; therefore, a simple search will give you the answers you need.
