We know it can be tricky to figure out what exactly is or isn’t covered by your health insurance. Honeybee Health’s team of pharmacists helped break it down so you aren’t left guessing.
Most plans come with a “formulary,” which is a list of prescription drugs that your plan covers. Typically, this formulary is split into different “tiers,” each of which is assigned a “co-pay” amount.
When you go to the pharmacy to pick your prescription, that co-pay is the amount you will pay if you are using your insurance. However, sometimes you might get to the pharmacy counter and find out your insurance doesn’t cover the drug you need at all. Unfortunately, this situation has become quite common. More than a third of insured patients said they or someone they live with has had this problem in the previous year, according to a 2020 national poll by National Public Radio.
If this happens to you, don’t panic! You can still get the medication your insurance doesn’t cover. Below we’ve written a guide for this type of situation exactly.
Drugs that aren’t covered by insurance
Certain drugs are rarely covered by health insurance such as “lifestyle” medications that are not deemed medically necessary. Examples include medications for cosmetic purposes (such as hair growth), sexual health (such as erectile dysfunction), and weight loss. Here is a table of some specific examples:
Overall, brand medications are rarely covered when there is a generic formulation available instead. Each year, pharmacy benefit managers might also drop additional specific medications from formularies. For example, in 2020 Caremark and ExpressScripts stopped covering 300 drugs, including Albuterol, Adcirca, Celebrex, Celexa, Cozaar, Glucophage, Keppra, Zomig, Zocor, Xalatan, Topamax, Toprol, Proair, Pravachol, Neurontin, Metoprolol/HCTZ, Lyrica, and Lamictal. For a full list, you can go here.
Why does this happen?
Every fall before open enrollment, pharmacy benefit managers (who are the middlemen of the health insurance industry) decide what drugs insurance companies will cover—i.e. they create the formularies. However, both insurance companies and PBMs can still decide to drop a drug later on in the year as well.
Insurance companies list a variety of reasons why drugs are dropped from their formularies or never included in the first place, such as:
- They want you to use an alternative drug because it is cheaper, has a better safety record, or for some other reason.
- The drug is available over-the-counter instead.
- The drug has not been approved by the FDA
- The safety or effectiveness of the drug is under question.
- The drug is not considered medically necessary.
However, other more insidious factors may also be at play, even if these reasons are not openly discussed by the insurance companies or PBMs themselves. Drugmakers pay PBMs a rebate when they include their drugs on the formulary. So, a drug might be excluded as part of a power-play on behalf of the PBM, who may be trying to get a better deal from a competing drug company.
What to do if your drug isn’t covered
The best next step is to find out the “cash price” for your medication. The cash price is the same thing as the “out-of-pocket price”; they both refer to what the medication costs at the pharmacy when you don’t go through insurance.
Out-of-pocket prices might vary depending on the pharmacy, so you should shop around to find the best price. As a rule of thumb, online pharmacies like Honeybee Health tend to have more affordable prices for medications than “retail pharmacies” (pharmacies you’d visit in person). This is because online pharmacies have fewer overhead costs, allowing them to pass savings onto customers.
You might be pleasantly surprised—oftentimes, out-of-pocket prices are cheaper than the co-pay your insurance company charged. That means you might end up saving money by not going through insurance.
What if I want to use my insurance?
It is possible to petition your insurance company to cover a drug that isn’t currently on your formulary. You can do this by submitting a formulary exception request, which asks your insurance company to make an exception for the drug you need.
For the exemption to be approved, your insurance company might require your doctor to demonstrate one of the following:
- Similar drugs on the formulary won’t work as substitutes
- An alternative drug on the formulary has caused or might cause you harmful side effects
Until the issue gets resolved, you might also be able to ask your insurance company for a one-time refill of your medication. However, even if the exemption is approved, your copay might end up being the most expensive co-pay possible (such as that for a non-preferred brand name drug). That’s why you should still compare the co-pay with cash prices to see if you can save by skipping insurance altogether.