Prescription Insurance Coverage: Key Questions to Ask Before You Enroll

When you’re choosing a health plan, it’s easy to focus on the monthly premium and forget about what happens when you need your meds. But here’s the truth: prescription insurance isn’t a bonus - it’s a lifeline. Sixty-seven percent of U.S. adults take at least one prescription drug. If you’re on insulin, blood pressure pills, antidepressants, or even a monthly antibiotic, your plan’s drug coverage can save you thousands - or cost you more than you ever expected.

Is My Medication Even Covered?

The biggest mistake people make? Assuming their meds are covered. Every plan has a formulary - a list of drugs it agrees to pay for. But not all drugs are created equal. Formularies are split into tiers, and each tier has a different price tag.

• Tier 1 (Generic): Usually under $10 per prescription. These are the go-to options for most insurers.
• Tier 2 (Preferred Brand): Around $40. These are brand-name drugs the plan encourages because they’re cost-effective.
• Tier 3 (Non-Preferred Brand): Can hit $100 or more. Your doctor may need to justify why you can’t use a cheaper alternative.
• Tier 4 (Specialty): These are high-cost drugs - think cancer treatments, MS meds, or rare disease therapies. You’ll pay 25-33% of the total cost. A single prescription could cost over $1,000.

Don’t just check if your drug is on the list. Find out which tier it’s on. A $500 monthly drug might be covered, but if it’s in Tier 4 and you have a Bronze plan, you could be paying $150 a month - not $50.

What’s My Deductible? And Does It Apply to Drugs?

Some plans have a separate deductible for prescriptions. Others combine it with your medical deductible. That’s a huge difference.

For example, a Bronze Marketplace plan might have a $6,000 deductible. If your plan applies that to drugs, you’ll pay the full price of every prescription until you hit that $6,000 mark. That’s not practical if you’re on $800/month meds.

On the flip side, Gold or Platinum plans often have $150 or even $0 drug deductibles. If you take three or more regular prescriptions, these plans can save you over $1,800 a year - even with higher premiums.

Do I Need Prior Authorization or Step Therapy?

Just because a drug is on the formulary doesn’t mean you can walk in and get it.

Many plans require prior authorization. That means your doctor has to send paperwork proving you’ve tried cheaper options first - or that the drug is medically necessary. If they don’t, the pharmacy won’t fill it.

Then there’s step therapy. This forces you to try a Tier 1 or Tier 2 drug before the plan will cover your usual one. I’ve seen people on stable medication for years suddenly told, “Try this cheaper one first.” It’s not just inconvenient - it can be dangerous.

Ask: “Is prior authorization or step therapy required for any of my medications?” If the answer is yes, find out how long it takes to get approved. Some plans take 72 hours. Others take weeks.

Which Pharmacies Can I Use?

Your plan might cover your drug - but only if you fill it at a specific pharmacy. Nearly 80% of Marketplace plans restrict you to a network of pharmacies. Walk into a non-network pharmacy, and you could pay 37% more.

Check if your usual pharmacy is in-network. If not, ask if you can get a mail-order option. Many plans offer 90-day supplies through mail-order with lower copays. For someone on a monthly med, that’s a $200 annual savings.

Also, ask about emergency fills. What if you’re traveling and need a refill? Some plans let you get a one-time fill at an out-of-network pharmacy - but only if you call first.

What Happens in the Coverage Gap? (The “Donut Hole”)

If you’re on Medicare Part D, this matters a lot. In 2024, once you and your plan have spent $5,030 on drugs, you enter the coverage gap. You pay 25% of the cost until you hit $8,000 in total spending. Then catastrophic coverage kicks in.

But here’s the twist: starting in 2025, the donut hole is disappearing. You’ll pay no more than $2,000 out-of-pocket for all your drugs in a year. And insulin will cost no more than $35 per month.

Even if you’re not on Medicare now, knowing these changes helps you plan ahead. If you’re on a long-term med, you’re likely to be on Medicare in the next 5-10 years. Make sure your current plan’s structure won’t leave you scrambling later.

How Much Will I Pay in a Year?

Don’t just look at monthly premiums. Calculate your total annual cost:

• Monthly premium
• Drug deductible (if any)
• Copays or coinsurance per prescription
• Out-of-pocket maximum for drugs

Example: You take three meds - one generic ($10 copay), one brand ($40), and one specialty ($1,200/month). Your plan has a $150 drug deductible, $5,050 out-of-pocket max, and $685 annual premium.

- Premium: $685 - Deductible: $150 (paid once) - Copays: $10 + $40 + $1,200 = $1,250/month → $15,000/year - But wait - once you hit $5,050 out-of-pocket, you pay nothing else.

So your real cost? $685 (premium) + $5,050 (out-of-pocket max) = $5,735. Without insurance? $15,000+. That’s a $9,265 saving.

When Should I Review This?

Open enrollment isn’t just for new people. If you’re on Medicare, the Annual Election Period runs October 15 to December 7. If you get insurance through your job or the Marketplace, it’s November 1 to January 15.

Use the tools. HealthCare.gov lets you enter up to 15 drugs and three pharmacies to compare plans side by side. Medicare’s Plan Finder does the same - just make sure you enter your drugs by NDC code, not just the brand name.

People who spend 20 minutes checking their meds before enrolling save $1,147 a year on average. That’s not a myth - it’s data.

What If My Drug Gets Removed?

Plans can change their formularies mid-year. If your drug gets moved to a higher tier or taken off entirely, you should get a 60-day notice. But don’t wait. Ask: “What’s your process for notifying members if a drug is removed or changed?”

Some plans offer temporary coverage while you and your doctor appeal. Others don’t. Find out now.

What’s the Best Plan for Me?

If you take one or two generics - maybe a statin and a daily pill - a Bronze or Silver plan might be fine.

But if you’re on multiple brand-name drugs, especially specialty meds? Go Gold or Platinum. The higher premium pays for itself.

A CMS study found that someone filling 12 maintenance prescriptions a year saves $1,842 with a Gold plan versus a Bronze one. That’s $153 a month - more than the premium difference.

Don’t pick a plan based on price alone. Pick it based on your meds.