Save Time and Money By Learning To Manage Your Drug Benefits

More than 75% of Americans have a drug benefit, and with the coming of Medicare drug coverage in 2006, millions more will, too. Here are some tips to help you learn pharmacy benefit lingo. See how many questions you can answer....

What's a drug formulary?

The list of drugs covered by your drug benefit is called a formulary. It's usually reviewed and updated on a regular basis by medical and pharmacy professionals. Ask your plan for a printed copy of your formulary, or its internet address, and make sure you supply that information to your doctor. If your medication is not included in the formulary, discuss alternatives with your doctor.

What's a copayment?

A copayment, or copay, is the portion of the prescription drug cost for which you are responsible. The remaining cost is covered (paid) by your plan.

What's a tier?

Drugs on a formulary are usually grouped into tiers, often referred to as "generics," "preferred" or "non-preferred." Your copayment will vary accordingly. A copay on a generic may be $10, but a copay for a non-preferred brand name drug may be half its actual cost.

What's a PBM?

A PBM is a pharmacy benefit manager, usually a company that administers a drug plan on behalf of a sponsor, such as your employer. PBMs work under a contract to provide many services, evaluating drugs, monitoring care and keeping expenses down to ensure your drug benefit is affordable.

What's a prior authorization (PA)?

Some drugs are dangerous for use by children, older people or pregnant women. Others require careful monitoring, are very expensive, or may have been prescribed for unapproved uses. In any of these cases, your plan will require that you obtain a PA in order for the drug to be covered.

What's an exception?

If the drug your doctor has prescribed for you is not on your plan's formulary, you may ask for an exception. If no similar drug or treatment is available, your plan may decide to grant an exception and cover it.

What's an appeal?

If your request for an exception or a PA is turned down, you have the right to appeal. Your plan will probably confer with your benefit sponsor to determine whether or not to cover the requested drug. But even if your plan doesn't cover the cost, that doesn't mean you can't get the drug -- it only means your plan won't pay for it.

If you knew the answers to these questions, then you are well on your way to managing your pharmacy benefit wisely. If not, clip this column and keep it for handy reference.