Prescription Drug Coverage

Insurance or benefit plans that provide financial assistance for the cost of prescription medications, making them more affordable for individuals.

 

Formulary:

A list of prescription drugs covered by a specific insurance plan, indicating the medications available and their associated costs.

 

Generic Drug:

A medication that is equivalent to a brand-name drug in dosage, strength, safety, and intended use, typically at a lower cost.

 

Brand-Name Drug:

A medication marketed under a specific brand by a pharmaceutical company, often more expensive than its generic counterpart.

 

Tiered Formulary:

A formulary that categorizes medications into different tiers, each with different cost-sharing levels for the insured individual.

 

Prior Authorization:

A process in which healthcare providers must obtain approval from the insurance company before a specific prescription drug is covered.

 

Step Therapy:

A prescription drug coverage requirement where individuals must first try a lower-cost medication before being approved for a more expensive alternative.

 

Co-payment (Co-pay):

A fixed amount that insured individuals pay for a prescription drug, often a percentage of the total cost.

 

Deductible:

The amount an individual must pay out of pocket for covered expenses before the insurance plan begins to cover the costs.

 

Co-insurance:

A cost-sharing arrangement where the insured individual pays a percentage of the prescription drug cost, and the insurance plan covers the remaining percentage.

Out-of-Pocket Maximum/Limit:

The maximum amount an insured individual is required to pay for covered services, including prescription drugs, within a specific time period.