Chronic illness

Open enrollment and formulary restrictions

As we’ve covered in previous blogs, preparing to enroll in health insurance coverage involves: knowing your deadlines, knowing your budget for related expenses, and listing your coverage needs.

These needs should include the doctors, specialists, hospitals, etc., that you do or might use—for comparing with provider networks (see more about that here). And your list should also include prescription drugs you take—for comparing with the formularies of the plans you consider.

Read on to better understand what you need to know about drug formularies.

For deadlines, see: Open enrollment details for Medicare and the health insurance marketplace.

Drug formulary

What is it?

Click to use CVC’s plan comparison worksheet to list your medical needs.

A drug formulary is a listing, specific to each insurance company, of which prescription medications are covered by the plan. The drug formulary specific to your plan will determine:

  • What drugs are covered.
  • Your copayment or coinsurance responsibility.
  • Restrictions for each drug.

Why is it important?

Your plans drug formulary lets you know what to expect. If your drug is not on formulary, you will be responsible for full cost of the drug. And even if your drug is on formulary some restrictions may apply.

Formulary restrictions

What is it?

A formulary restriction sets specific limitations or requirements on your coverage for certain drugs. These restrictions include:

Prior authorization

Your insurer may require an approval process to confirm your prescription drug is medically necessary.

Your plan may require a prior authorization if a drug:

  • Is a brand name and has an available generic.
  • Should only be used for specific health conditions or age groups.
  • Is often misused or abused.
  • Is harmful when combined with other drugs.
  • Has serious side effects, etc.

If a prior authorization is required, your doctor will need to be notified to complete the approval process on your behalf. This is something your pharmacy may prompt or assist with and there is often a designated department and phone line with your insurer and pharmacy for prior authorizations.

Quantity limit

Your plan may set a quantity limit on the amount of a specific drug they will cover over a certain period of time.

For example your plan may set a quantity limit for your prescription drug of 60 tablets every 30 days. If your doctor prescribes that drug at 90 tablets every 30 days (three a day), you would be responsible for the cost of the medication beyond the quantity limit. Or, your doctor can work with the insurance company to get authorization for the higher quantity.

Step therapy

If your plan has a step therapy requirement for your drug, your insurer will require you to try a similar, less expensive drug before it approves coverage for the prescribed drug. Your insurer implements this restriction when it wants to know the less expensive option doesn’t work for you first.

If you have already tried the less expensive drug and it didn’t work for you, or if it is medically necessary for you to be on the more expensive drug, your doctor should contact the plan to request an exception.

Why is it important?

If you have a chronic illness, finding a plan with no formulary restrictions on your drugs is likely not realistic. If you require a drug that is subject to a formulary restriction, being proactive in your plan search and identifying any restriction you have to overcome is imperative. As soon as you enroll into a plan you can begin the approval process for your formulary restrictions, even if your coverage does not begin immediately. Notifying your doctor’s office right away and staying informed on the submission process will help promote a positive outcome for your coverage needs.

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