Before the Affordable Care Act established minimum requirements for health insurance in 2014, prescription drug benefits were missing from roughly one in five health plans purchased by individuals. Thanks to Obamacare, all qualified health plans must provide 10 essential benefits, including prescription drug coverage.
The new health plans for individuals and small groups greatly expand coverage of medications requiring a prescription. However, significant variation in those benefits can result in costly differences in out-of-pocket costs for consumers, especially those who need regular prescriptions.
Because pharmacy benefits can be complex, it pays to spend time reviewing your use of medications and comparing the prescription drug benefits of various plans. A few general guidelines:
- If you need regular prescriptions, you might save with a Gold or Platinum plan, which generally has higher monthly premiums and pays more of the costs when you need care.
- If you don’t take regular prescriptions, you might save with a Silver, Bronze, or Catastrophic plan, which has lower monthly premiums and pays less of your costs when you need care.
- If you qualify for a federal subsidy on out-of-pocket costs based on your household size and income, a Silver plan may offer the best value. To receive the subsidy, you must enroll in a Silver plan through the Health Insurance Marketplace.
Although this focuses on Obamacare health insurance plans, the same ideas apply to short term health insurance and catastrophic health insurance.
What Medications Do You Need?
Health plans will help pay the cost of prescription medications on their preferred drug list, or formulary. Lists vary from state to state and from plan to plan, so check the preferred drug list for the specific health plan in your state.
To determine whether a health plan will cover the prescription drugs you take, look for:
- The medication’s exact name
- The size, such as 40 mg
- The daily dose, such as two pills
- The 30-day supply, such as 60 pills
Drugs not on the list typically are not be covered by the health plan, and the money you spend on these drugs does not count toward your deductible or the annual out-of-pocket limit.
Most plans have negotiated for reduced prices with a network of approved pharmacies. If you are interested in a particular insurance company’s health plan, visit the company website to find network pharmacies in your area. If you take medication regularly for a chronic condition, like arthritis, diabetes or asthma, plans with a mail-order pharmacy offer convenience and savings. The plan usually charges less for a 90-day supply of maintenance medications mailed directly to your home. You typically pay much more going to a pharmacy not in the network.
What’s the Deductible?
Most health plans have a deductible, the amount of money you pay during a year before your coverage begins. A single deductible applies to all medical expenses. For simplicity, compare that to the total deductibles for plans that have a separate deductible for prescription drugs. The best deal on medication might be with health insurance plans that share the cost of prescription drugs before you’ve met your deductible.
Copay or Coinsurance?
To combat rising drug prices, insurers have moved a greater share of the cost to consumers. One common practice replaces fixed-dollar copays for each medication on the health plan’s preferred drug list. Instead, you may see coinsurance rates, usually ranging from 10 percent to 50 percent of the medication’s price.
When comparing coverage, check the copayment or coinsurance for each of your medications. Coinsurance may save you money on inexpensive medications, but copayments protect you against big bills for expensive specialty drugs. Plans that have no cost-sharing after you reach the deductible will help control your medication expenses.
What’s the Limit on Out-of-Pocket Expenses?
In 2014, the maximum out-of-pocket costs for a qualified health plan for 2014 are $6,350 for an individual plan and $12,700 for a family plan. If and when the amount you’ve paid in deductibles, copayments and coinsurance reaches the annual limit, the insurance company pays 100 percent of your costs for covered medical care and prescription drugs.
Monthly premiums for Platinum and Gold plans are higher partly because these plans feature a lower limit on out-of-pocket costs. If you have expensive monthly prescriptions, a plan with a lower cap may lower your total cost.
Want prescription drug discounts right now? Visit HealthCare.com’s discount drug website.