Glossary of Health Insurance Terms To Know

A Formulary is a list of medications an insurer will pay for. 

In order to encourage insureds to purchase less expensive drugs, formularies are often divided into sections with differing tiers. Each tier has a different co-pay you have to pay. For instance, a formulary could have three tiers:

• Tier 1: New branded drugs which have a high co-pay
• Tier 2: Branded drugs which have a less expensive co-pay
• Tier 3: Generic older drugs which have the lowest co-pay.

Since no insurance policy is set in stone, exceptions can be made. If a plan has a formulary and a drug is not on the formulary, an insured can ask that the drug be added to the formulary as an exception in his particular case.

NOTE: If you want an exception:

• Speak with your doctor or other health care provider. Find out:
  • Would a less expensive drug do the same thing for you?
  • If not, ask the doctor for evidence that will convince the insurance company that the drug is necessary for you. 
• You can also ask your health care provider to apply for the exception for you.

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