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All health insurance sold to Montanans on healthcare.gov is required to include prescription drug coverage. But benefits vary from plan to plan. And prescription drug coverage is often different from the rest of the health insurance plan.

Find out what you need to know to pick the right one for you.

Words to Know

Deductible

Deductible is the amount of money you pay for certain medical services before your health insurance company begins to pay. In many health plans, the deductible does not apply to prescription drugs.

Coinsurance

Coinsurance is the percentage of your medical bill that you must pay. You usually pay coinsurance after you have met your deductible. For example, if your plan has 20 percent coinsurance for MRIs, you will pay 20 percent of the MRI after you have paid your deductible. Some plans apply the deductible and coinsurance to all prescription drugs. This means that you must first pay your entire deductible before your insurance company begins to pay toward your prescription drugs. After you have paid your deductible, your insurance company will pay a portion of your drug costs and you will pay the rest.

Co-pay

A co-pay is a fixed amount you pay for prescription drugs. For example, if your plan has a $10 co-pay for generic drugs, you pay the pharmacist ten dollars for you prescription.

Formulary

A formulary is the list of medications a health insurance company prefers. Drugs not listed in the formulary will cost your more. You will find the formulary for each insurance company at their website.

Formularies can change during the time you have your insurance. If that occurs – and a drug your doctor has prescribed for you is no longer covered in the same way – you have the right to appeal that change. Your doctor may need to write a letter to the insurance company explaining why you need that particular drug. Consult with your insurer regarding the correct appeal process. If you encounter problems, call the CSI for assistance.

Sometimes, a formulary that had covered a name brand prescription drug will change to cover the identical generic drug, instead. Sometimes, the formulary is substituting a different brand name drug that works the same way. A change in the formulary isn’t always bad and it may save you money.

Insurance companies group usually prescription drugs into four categories and how much you pay out-of-pocket depends on the tier your medication falls into: Generics, Preferred, Non-Preferred and Specialty.

  • GENERICS (TIER ONE): A generic drug is the least expensive under any drug plan. They are drugs where the patent has run out and are no longer available as “brand name.”
  • PREFERRED (TIER TWO): A drug formulary is a continually updated list of medications supported by current evidence-based medicine that encourages the use of safe, effective medications. Insurers often use the term “preferred drug” in their drug plans for these “brand name” drugs. However, formulary development is also driven, in part, by cost. Sometimes a preferred drug will be in that category because it costs less than a similar drug that does the same thing. Formularies are updated quarterly. A drug that is preferred today could be non-preferred in six months based on cost, not a change in the science behind the effectiveness of the drug.
  • NON-PREFERRED (TIER THREE): Non-preferred drugs are also brand name medicines – usually those that are more expensive than the preferred option, but which treat the same illness or symptoms. Sometimes these drugs are also considered less effective or less safe. Physicians may justify access to non-formulary drugs when medically necessary.
  • SPECIALTY (TIER FOUR): Specialty drugs are non-generic, brand name medicines that are used to treat complex or chronic conditions that usually require close monitoring, such as MS, hepatitis, rheumatoid arthritis, cancer and others. These drugs may require special handling and may need to be dispensed through a specialty pharmacy. These drugs are very expensive — often thousands of dollars for a 30-day supply. Drug plans usually require prior authorization for specialty drugs. If authorization is denied, there is an exception process, followed by the normal internal and external appeal process.

There are three ways insurance companies cover prescription drugs in Montana.

Co-pay

When you go to the pharmacy, you will have to pay a flat amount for your prescriptions, depending on where the prescriptions fall in the tier ranking. These co-payments do not count toward your deductible and you don’t have to meet your deductible before the insurance company begins covering your drugs. While your co-pay will not count toward your deductible, it does count toward your yearly out-of-pocket spending cap.

$0 After Deductible

When you go to the pharmacy, you will pay the full cost of your medicine until you meet your deductible. After that, the company will pay the entire cost of your prescriptions.

Coinsurance After Deductible

When you go to the pharmacy, you will have to pay the full cost of your medicine until you meet your deductible. After that, the company will pay a percentage of cost of your medicine between 25 and 50 percent.

Sometimes an insurance plan that seems like the right fit for you could have a prescription drug benefit that would make the plan unaffordable. It’s a good idea to look at the prescription drug plan alongside the plans other benefits. We have created a chart that stacks up prescription drug coverage with other key benefits of all 2018 insurance plans sold in Montana. Download them here.