Understanding your Insurance Policy’s Formulary

Just because your medications are covered today doesn’t mean that they will be covered next month. Roughly 10% of those purchasing medications will find that their insurance company no longer covers the drug they take. Formularies change very often so let’s discuss drug formularies, how they work and what you can do to reduce your healthcare costs. 


A formulary is just a list of medications that your insurance company covers. Most formularies have three or four options listed from cheapest to most expensive:

  1. Preferred Generics
  2.  Acceptable Generics
  3.  Preferred Name Brand
  4.  Acceptable Name Brand
  5. Medication not on formulary

In most cases, the drugs are categorized by how much the insurance company has to pay for the medications. In general, you will pay less for a drug in category 1 than you will for a drug in category 4.  Your physician usually does not know what is covered by your formulary or what the prescribed drug will cost you.


What happens if the drug prescribed is not on your formulary?

1)   Call your doctor and find out if another medication on your formulary will work just as well.

2)   If not, your doctor can petition your insurance company and notify them that the medication is necessary.

3)   Talk to your pharmacist to see if an alternative is available or find a way to petition your insurance company

4)   If you must stay on the medication, find the cheapest option by shopping around. 

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