The Rx Ladder

Prescription medication, whether for an illness or a chronic need, is an important part of your medical insurance benefits. But some levels of medication cost more, and these types are covered differently by different insurance providers. Read on for a summary of common prescription tiers and related terms:

Prescription Medications: Medications prescribed by a doctor. Cost of these medications is determined by their assigned tier: generic, preferred, non-preferred or specialty.

Generic Drugs: Drugs approved by the U.S. Food and Drug Administration (FDA) to be chemically identical to corresponding preferred or non-preferred versions. Usually the most cost-effective version of any medication.

Preferred Drugs: Brand-name drugs on your provider’s approved list (available online).

Non Preferred Drugs: Brand-name drugs not on your provider’s list of approved drugs. These drugs are typically newer and have higher copayments.

Specialty Drugs: Prescription medications used to treat complex, chronic and often costly conditions. Because of the high cost, many insurers require that specific criteria be met before a drug is covered.
Prior Authorization: A requirement that your physician obtain approval from your health insurance plan to prescribe a specific medication for you.

Step Therapy: The goal of a Step Therapy Program is to steer employees to less expensive, yet equally effective, medications while keeping member and physician disruption to a minimum. You must typically try a generic or preferred-brand medication before “stepping up” to a non-preferred brand.

Content by Lockton Dunning Benefits