We're fortunate that we have good health insurance offered through my work. It's paid for the large majority of the issues we've had. After seeing the costs that can accrue with even a somewhat severe hospital stay or an emergency room visit, and then seeing the amounts that health insurance picked up, I can sympathize more readily with people who have run into financial trouble due to medical bills. It doesn't take much.
A part of many health insurance plans is a prescription drug benefit. Prescription drugs can do wonders, but they also can be quite expensive. Health insurance covers portions of the cost of the prescription drugs.
The tiered formula for the formulary
Not all drugs are covered equally in the eyes of the insurance company, though. The list of covered drugs — also called the formulary — has levels of coverage, or tiers. Most generic drugs are in formulary Tier 1, which usually means the lowest out-of-pocket expense, or copay. This is possible because the generics cost less than the name-brand version.
Higher-cost generics and “preferred” name-brand drugs — drugs for which there's a negotiated price — make it into Tier 2. These cost more, and have a higher copay.
Non-preferred name-brand drugs are usually Tier 3 due to their retail cost. These have the highest copay. Very high-cost or specialty drugs have their own Specialty Tier; insurance covers a set percentage of the drug cost.)
When generics attack
My wife has a long-standing relationship with one particular prescription drug. She did very well with it. When she began taking the drug, there was no generic version.
When the generic version came on the market, she started taking that one, primarily because that's the one our insurance would cover. The idea is that generics mimic the name-brand, so cheaper wins.
Well, the generic one wasn'tthe same. My wife didn't do as well with it. (Actually, it took a while for her and her doctor to figure out that the generic drug was the culprit.) So she switched back, but the doctor needed to specify on the prescriptions not to fill with the generics.
This fixed the issues that my wife was having, but there was a cost. The generic was a Tier 2 drug, but the name-brand drug was a Tier 3 drug. More out-of-pocket cost. The insurance company regularly sent us letters to let us know that we could be saving money by using the generic version of the drug. This of course wasn't news to us, but she wasn't going to go back to using a drug that was causing more problems than they fixed!
Can I have an exception, please?
What we didn't know is that we could make the case to the insurance company that there was really no choice for us: my wife had to take the name-brand drug because the generic version wasn't working. For the past year, the insurance company thought we effectively had an option, but just weren't electing to take it.
So, with the help of my wife's doctor, she filed a formulary tier exception request. This asked the insurance company to put the name-brand version of the drug into a lower tier, and gave the reasons why.
She recently found out that she could do this. Additionally, there were studies that suggested that the generic version of this drug didn't perform the same as the name-brand, which is a bad thing. This strengthened the case for the formulary tier exception.
Today she got word that the formulary tier exception was approved. Instead of Tier 3, her drug is now Tier 2.
The price difference will save us about $400 this year with reduced copays.
If you have to take more expensive versions of a prescription drug, check around to see if there's a viable route for you to get a break on the copay.