Getting the Most Out of Your Commercial Prescription Drug Insurance
The purpose of this article is to help you make the most of your prescription drug insurance. There are 4 sections of this article. Click the links to navigate to the sections faster.
Understanding your formulary
The formulary is the official list of medicines your insurance will pay for. For diabetes medications, there are about 10 drug classes commonly used. In each drug class, there are often 3-5 brands of medication. Your insurance will typically have 1 or 2 brands of drug from each drug class on the formulary. If a diabetes medication is not on the formulary, then it is unlikely to be affordable. Therefore, you need to know how to access your formulary! They used to send out formulary books every year, but now it is typically just on a website. Know how to log in and find it. Drugs included on the formulary list can (and often do) change from year to year. So a medication on formulary this year may not be next year, so at the beginning of each year you may need to check the formulary again.
There are 5 elements to understand about a formulary:
1. Formulary restrictions and Step therapy
Knowing that a medication is on the formulary is just the beginning to figuring out is you can afford it. The next step is to determine if there are restrictions on the medication. If there are restrictions on the medication, You will not have access to it unless you have met the requirement(s) to remove the restrictions. For example, many insurance plans will not pay for the drug class GLP-1 medications if you are not already taking metformin (or previously took it and cannot take it any longer). This restriction is also referred to as step-therapy or a step edit. Step therapy is a policy that requires you to first try a lower-cost drug that has been proven effective for some people with your condition before you can “step” up to a more expensive drug.
2. Prior authorizations
If the medication is on formulary, and you have met requirements for any restrictions, there still may be a prior authorization required. If the drug is listed as being available only by prior authorization, that means that your insurance company has a hidden set of rules that govern when the drug will be covered. Yes, you read that right. They do not publish this information and do not make it available to you or to your physician. Your doctor has to submit answers to a series of questions. Depending on their hidden criteria, the answers will earn you prior authorization, or they will reject the medication and not cover it.
3. Drug Tiers
OK, so the medication is on the formulary, you have met any restrictions, and you’ve gotten over the hurdle of the prior authorization. This means you can use the medication, right? Well, you can, but you still may not be able to afford it if it is not on the right “Tier”.
Most prescription drug plans place prescription drugs into different “tiers”. A drug in a lower tier will cost you less than a drug in a higher tier. Your insurance plan may have just 3 tiers, or may have upwards of 7 tiers! Below is a common example of how a plan might divide its drug tiers:
Tier 1: Most generic drugs. These will cost you the least. Very few diabetes medications are in this Tier.
Tier 2: Some insurers have a second tier of more expensive generic drugs.
Tier 3: Brand-name drugs which are preferred by your insurance company. The “preferred brand” Tier is the sweet spot for brand drugs, and you want to know which diabetes drugs in your formulary are in this tier every year.
Tier 4 — Non-preferred brand-name drugs. You will pay a much higher percentage of the cost of the drug in this tier, making this Tier unaffordable for most people. However, copay coupons are a trick that the drugmakers use to pay your increased share of the cost, which may bring the price back down to what you would have paid in the “preferred tier”. There is another section on this later.
Tiers 5 and 6 — Specialty drugs. Drugs here are considered by your insurance to be very high-cost drugs, and will have very stringent rules for you to obtain them. Diabetes drugs are not in these categories, fortunately.
Key Point: The “preferred brand” tier is the sweet spot for brand drugs, and you want to know which diabetes drugs in your formulary are in this Tier every year. However, you can often afford the “non-preferred brand” tier drugs if the drugmaker has a copay coupon.
4. Deductibles
Alright! The drug is on the formulary, no restrictions, passed the prior authorization, and the drug is on a preferred tier. The drug should be affordable, but there is one last element to consider. Do you have a deductible, and if so, how much is it? Your deductible is the set amount you need to spend each calendar year before your plan’s benefits kick in.
Some insurance plans apply the “general medical” deductible to prescriptions as well, which means that the plan won’t make any payments for your medications until you’ve met your entire medical deductible. Other plans have a lower deductible that applies just to prescription coverage. You need to know which one you have!
Key Point: All patients with diabetes need to know what their yearly prescription drug deductible is!
5. Copayments and coinsurance
The amount you pay for each prescription after you’ve paid your deductible is either a copayment or coinsurance. Copayment and coinsurance are not the same thing, and your insurance will have one or the other for prescription drugs. You need to know which it is. If you have the choice between prescription drug plans, you will almost certainly want one that has copayment rather than coinsurance.
Copayment: You pay a set amount (eg, $25) for all drugs on a tier. This is typically more favorable to you.
Coinsurance: You pay a percentage of the cost (eg, 25%) of the drug. This is typically unfavorable to you, as diabetes drugs often cost hundreds of dollars.
Top 3 things you can do to get the most out of your prescription insurance
Print out your diabetes formulary every year. You can find it on the website, or just call your insurance company.
Bring your formulary to your doctor every year.Know your medication deductible.
Be aware that there are prescription copay assistance cards for most medications, and know how to find them.
Using Copay Coupons to decrease the price of drugs
If you have commercial drug insurance, you may be able to lower your prescription drug cost through a copay coupon (this is also referred to as a copay assistance program). Copay coupons typically will only work if you have commercial insurance (so most of these will NOT work if you are uninsured, have Medicare part D, or have Medicaid). There are 2 notable exceptions, both with regard to insulin. Sanofi (who makes ademlog, apidra, lantus, and toujeo) and Novo Nordisk (who makes novolog, fiasp, tresiba, levemir, and novolog mix) both now have programs where you can get combinations of their insulin products for $99 a month, even if you do not have insurance. These programs are separate from their other co-pay card programs.
How to use a co-pay card
Find your medication in the table below and click the link to go to the manufacturer website. Complete the online form to get the coupon. You can either print out the coupon to take to the pharmacy, on just pull it up on your phone at the pharmacy.
What to do when a drug is too expensive or not covered
First line intervention:
Check to make sure you’re not still in the deductible phase of your insurance. If you are, then the drug may be affordable once you pay your deductible. (sometimes, copay coupons will help you during the deductible phase, be sure to try using a coupon)
Is a Prior Authorization needed? Check with your doctor that this was completed. (note that completing a prior authorization does not always means the drug is going to be covered!)
Second-line intervention
Copay assistance programs will help when you have not yet met your prescription deductible, if the drug is on a high tier (so your portion of the drug cost is high), or in the drug is on a low tier but the copayment/coinsurance is still high. Importantly, this will not work if the drug is off your insurance’s formulary.
If that doesn’t work…
You can try something like blinkhealth, but the cost is still probably going to be too high. It’s best to just switch to a different drug.
Patients with commercial insurance do not qualify for Patient assistance programs (PAPs), so that is not an option.
