Prescription Drug Coverage
What Does Prescription Drug Coverage Mean?
Prescription drug coverage is a component of health insurance that helps pay a portion of the cost of medication, provided it is prescribed to the insured by a healthcare professional. This coverage typically includes copayments and deductibles, which the insured may need to pay out-of-pocket.
Insuranceopedia Explains Prescription Drug Coverage
The prescription drugs covered by a health plan are listed in a drug formulary. These are the only medications that the health insurance will cover. Insurance applicants are advised to carefully review the formulary before purchasing a health insurance plan to ensure that the drugs they may need are included.
How much a policyholder will pay out of pocket for the drugs depends on their specific insurance policy. Insurance plans often categorize drugs into different tiers, with generic and brand-name drugs placed in separate categories. Insurers may encourage policyholders to choose the more affordable generic alternative to a drug in the brand-name tier.
