How to understand prescription drug benefits

Knowing about the different kinds of prescription drugs and how your benefits work can help you manage your costs for the medication you need.

It’s important to understand how your health plan covers different kinds of drugs so you won’t be surprised by unexpected costs at the pharmacy counter. Where you get your prescriptions filled can also affect how much you pay for drugs.

To get the highest level of prescription drug coverage, be sure the pharmacy you choose is in your plan network and your drugs are covered. Plans vary, so be sure to sign in to your member account to see your plan network and the list of drugs your plan covers.

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What prescriptions do health plans cover?

Not all health plans cover the same prescription drugs. Your health plan has a list of all the drugs it covers, called a formulary. If you need a drug your plan doesn’t cover, you will have to pay more — possibly the full price — out of your own pocket.

You may also have to share the cost of some covered drugs with your plan. How much you pay depends on the type of drug and the tier the drug is in.

Prescription drug types and tiers

Blue Cross and Blue Shield of Minnesota and Blue Plus health plans usually group covered drugs into numbered tiers, which vary by plan. Generally, the lower the tier number, the less you will pay for your drugs. Each tier includes different types of drugs.

Here are some tiers and types of drugs you might see in your plan materials:

  • Tier 1: Preferred generic drugs. Generic drugs have the same active ingredients and work the same way as the brand-name drugs they copy. They usually cost less than the brand-name versions.
  • Tier 2: Non-preferred generic drugs. You will pay more for these generic drugs than for preferred generic drugs.
  • Tier 3: Preferred brand drugs. These drugs are included in a plan’s list of covered drugs and may not have a generic version. They cost more than generic drugs but less than non-preferred brand drugs. 
  • Tier 4: Non-preferred brand drugs. You will pay more for these drugs than for preferred brand drugs. You may be able to get a generic drug instead that will cost you less.
  • Tier 5: Specialty drugs. These drugs are used to treat ongoing health conditions and can be costly. They often require special handling and may have to be ordered through a specialty pharmacy.

How to save on prescription drugs

There’s no question that prescription drugs can be costly even when they’re covered by your health plan.

Here’s how you can save money without putting your health at risk:

  • Start with generic. If your medication is available as a generic, try that first.
  • Check the plan formulary. If your drugs aren’t listed, ask your doctor for a similar drug your plan will cover. Formularies can change throughout the year. Be sure you’re looking at the most up-to-date formulary or contact your plan to find out if your medication is covered.
  • Find a pharmacy in your plan network. You’ll pay more for prescriptions you have filled at pharmacies that are not preferred or in your network. Check with your plan to find an in-network pharmacy near your home or work.
  • Use a mail order pharmacy for drugs you take on a regular basis. You may be able to save money when you use a mail order pharmacy for medications you take for chronic conditions like high blood pressure or diabetes. Your prescription drugs will be sent directly to you by mail.
  • Talk with your doctor. If you find it difficult to manage the cost of your prescription drugs, ask your doctor about alternative medications that may cost less.
  • Take medicine as directed. Taking your drugs only half the time or taking just half the dose to save money can put your health at risk and lead to bigger bills down the road.

Prescription drug programs

Your health plan may have programs in place to help control costs and ensure the safe use of prescription drugs.

These programs may include:

  • Step therapy. With this program, your plan requires your doctor to first prescribe a safe, lower-cost drug before stepping up to a drug that may be newer or more costly.
  • Prior authorization. To ensure safe and appropriate use, some drugs must be approved by your health plan before they will be covered.  
  • Quantity limits. This program promotes safe use and automatically limits how often you can get a drug filled or how much you can get at one time.