May 29, 2014 How-To

Decoding your Rx Benefits

Prescription medications can have a big impact on your health – and on your wallet. That’s why it’s so important to understand how your prescription drug coverage works – which drugs are covered, how much they cost, and how it all works. We can guide you through it.

What is a formulary?
A drug formulary is a list of both brand-name and generic prescription drugs that CDPHP® covers, based on efficacy, safety, cost-effectiveness, and overall value of the drug. It’s created by a committee of pharmacists and physicians who use the latest pharmaceutical data and research to advise CDPHP administrators.

Formulary lists are often divided into three tiers:

Tier 1: These are typically generic drugs and have the lowest copay.
Tier 2: These tend to be brand-name medications with higher copays.
Tier 3: All other covered drugs fall in this tier and have the highest copay. Typically, lower-cost or generic alternatives are available.

CDPHP has two formularies – Formulary 1 and Formulary 2. CDPHP members can check their member ID card to find out which formulary their plan covers. The CDPHP Rx Corner is a valuable tool for getting coverage details for each of these formularies, as well as information on Medicare drug plans, pricing, prior authorization requirements, and more.

Generic vs. brand-name drugs
Brand-name drugs and their generic equivalents may differ in color, shape, or size, but they have the same active ingredient. In fact, the U.S. Food and Drug Administration (FDA) requires generics to meet several strict requirements. As a result, the generic version is usually just as effective as the brand-name drug, but it is less expensive, which is why it is preferred by CDPHP.

Navigating your prescription drug coverage
So, how do you make sure that you are getting the most cost-effective drugs? Next time your doctor writes you a prescription, ask if it has a generic version. You can also check with your pharmacy before you fill the prescription. If the drug you need does not have a generic version, then you can either pay your cost-share, based on its tier (assuming that it’s covered by your health plan), or ask your physician if there is a less expensive alternative.

More ways to save
CDPHP also offers members several ways to save money at the pharmacy. Our Rx for Less program offers deep discounts on a specific list of drugs when purchased at Price Chopper, CVS, or Walmart. Many of those discounts result in medications that cost as little as $1.

CDPHP members in high deductible plans may also benefit from the CDPHP Preventive Drug List, a list of medications that are not subject to the deductible, so members can immediately start paying the lower, tier-based cost-share instead of the full cost of the drug.

Ultimately, your approach to prescription drug coverage should be based on one thing: getting the most effective drugs in the least expensive way. By using your knowledge of formularies, tiers, and generics, as well as your specific plan benefits, you can be an educated consumer and achieve this goal. And CDPHP is here to help.

Meghan Cassidy
About the Author

Meghan joined CDPHP in 2004 and is currently director of product innovation. In this position, she manages all commercial, Medicare, and self-funded lines of business for CDPHP, plans the development and execution of new products and services, and refines existing products. Prior to joining CDPHP, she worked as a sales representative for Lake Champlain Chocolates. Meghan earned a bachelor’s degree from New York University and an MBA from the University at Albany.

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