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How To Find Out What Your Health Plan Includes About Drugs


If you know what your plan provides about drugs, you'll know how to work the system to get the drugs you need paid for by your insurer.

Most insurance companies and government health plans only pay for drugs which are considered to be "medically necessary" and are on the plan's Formulary. You normally have to pay a part of the cost, generally known as a "co-pay."

  • Medical Necessity: "Medically necessary" (also known as "medical necessity") means that a drug or treatment is required to treat an existing medical condition. As a general matter, a doctor's prescription usually indicates medical necessity. Plans have been known to second guess doctors. If this happens, follow the insurer's rules and appeal.
  • Formulary: A formulary is a list of drugs which are approved for payment by the insurer.  Each insurer has its own formulary. There are three different types of health insurance formularies:
    • A closed formulary: a plan that won't pay for any drug that is not on the list unless your doctor requests an exception and the exception is granted.
    • An open formulary: a plan that permits coverage of drugs which are not on the list, but may require your doctor to explain for the reason for the presription and/or may charge you a higher co-pay (see below).
    • Selective or partially closed formulary: a plantaht only pays for certain drugs for certain treatments. The plan may exclude some treatments all together, such as for baldness or obesity.
  • Co-Pays: Most plans irequire that you pay something each time you fill a prescription. This is known as a "co-pay."  Instead of one co-pay across the board, it is common for insurers to have what they refer to as "tiered co-pays." This means there is a different co-pay depending on the drug. For instance, the company may charge a high co-pay for new, expensive drugs, a lower one for older, established drugs, and yet a lower amount for generic drugs. 

When You Receive A New Prescription, Immediately Check To See If It's On The Formulary Or Get An Alternative. If you receive your health insurance through a program that only pays for drugs on the provider's list, ask your doctor to verify that the prescribed drug is on that list, for your condition, before you leave the doctor's office. If it's not, consider an alternative medication that is on the list or enlist your doctor to help obtain an exception from your insurance company.

How To Get Your Insurer To Pay For A Drug Not On The Formulary:  

  • Some plans will pay for drugs not on their approved lists if your doctor certifies in writing that you need them to maintain your health. Other plans are more strict. They require poof that you had a bad reaction to a listed drug before they will approve another medication.
  • Your insurer will provide a copy of the procedures to follow to request payment for drugs that are not covered.
  • If you need new, less-proven or very expensive drugs, and your insurance company balks or makes approval unduly complicated, THERE IS FREE HELP AVAILABLE. Most drug companies offer patient assistance programs, which, in addition to providing free drugs to a limited under of people, also help navigate the insurance company's approval maze for drugs they manufacture.

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