Money-saving tip: Get to know your health plan’s drug formulary

When it comes to planning for your health care expenses, most people may be familiar with things like copays and deductibles. But there’s another aspect of coverage that can have a big impact on prescription costs: A health plan’s drug formulary.

Knowing what a formulary is, and how it works, can provide peace of mind — and savings on medications.

First things first: What is a drug formulary?

A drug formulary is simply a list of prescription medications covered by a health insurance plan. Pharmacists spend a lot of time reviewing scientific research and gathering information about how effective and safe different drugs are before including them on the formulary. See how this works.

The list can include name-brand and generic drugs. If a medication isn’t on the list, it’s considered “nonformulary,” which usually means higher out-of-pocket costs or no coverage.

How to navigate a drug formulary’s different levels

Formularies generally use a tiered system to set the cost of medications. The system categorizes drugs into different levels based on the type of medication and its overall value.

There can be three to six tiers in a health plan’s formulary. Cost-sharing responsibility (copay or coinsurance) rises with each tier. This system encourages the use of the highest value and equally or more effective medications when possible. It’s one of the ways we aim to balance members’ individual needs and those of the population as a whole.

In general:

• Tier 1 includes generic drugs and has the lowest cost-sharing.
• Tier 2 includes preferred brand-name drugs and has mid-level cost-sharing. These types of medications may not have a generic equivalent but are cost-effective.
• Tier 3 includes nonpreferred brand-name drugs with higher cost-sharing.
• Tier 4: If applicable, this level may include specialty medications that have the highest level of cost-sharing.

Ways to get more bang for your prescription buck

• Before starting new meds, check to see what tier the medication is in and how much of the cost you’ll be expected to cover. To see the estimated price of a prescription, use Regence’s online tool by signing in to regence.com (Select “Pharmacy,” then “Find a drug” under “Check costs and coverage.”).
• Ask doctors to find an alternative or generic version that’s as effective but in a lower tier.
• Three-month supplies of daily medications may help lower out-of-pocket costs and lessen time at the pharmacy.
• Many drug makers offer rebates or patient assistance programs for name brand drugs.
• Try using a mail-order pharmacy for medications, which could cost less out-of-pocket.

Regence members can get answers at any time through the Ask a Pharmacist tool in their regence.com account.