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Making the Most of Your Medications Budget

Refilling a prescription often feels like a guessing game. Sometimes the medication costs twice what you expect, other times it’s next to nothing.

Many people worry about the price of medications even when using a health plan’s pharmacy benefits. Of the Americans taking prescription medicine, at least a quarter have difficulty affording their pharmacy bill.

Here’s what you need to know to help better understand your medication costs.


What is a prescription drug list?

A drug list is a catalog of the medications your health plan covers and how you share in the cost. Some plans call it a drug formulary. Covered medications usually cost less than ones that aren’t covered.

Health plans typically revise this list twice a year, although changes that benefit consumers (such as new medications or price cuts) may occur at any time.

Medication lists break drugs into groups called tiers, and each tier has a certain payment level. You may have a set copay or coinsurance for each level. For high-deductible plans, tier pricing might not apply until you hit your deductible. Tiers vary by health plan, but generally look something like this:

  • Tier 1: Mainly generics and some brand names; lowest cost.
  • Tier 2: A mix of generic and brand-name medications that provide good overall value; mid-range cost.
  • Tier 3: Mostly brand-name drugs; highest cost.

What should I ask?

As with all aspects of your health care, you have a say in decisions about medications and their cost. Consider asking your doctor or your pharmacist the following questions.

  • What drug are you prescribing for me?
  • How long will I need to take it?
  • Is this medication generic or brand name? Does my health plan cover it?
  • Does my plan require prior authorization (pre-approval) or step therapy (trying lower-cost medications first to see if they work)?
  • What tier is this medication in on my plan’s drug list, and what will it cost me? Is there a lower-tier option that would work for me? What are its benefits and side effects?

Where can I learn more?

Your insurer’s website will include its drug list. You can often download your health plan’s app to manage medications on the go and use drug-pricing tools. There’s no need for sticker shock if you do your homework.