Making the most of your medications budget

If you've ever been surprised by the cost of a prescription, you're not alone. Drug prices can vary from one medication to the next, making it challenging to budget for healthcare expenses. Understanding how prescription costs are determined can help Medicare beneficiaries better manage their spending and confidently use their benefits.

This can be especially important as about 60% of U.S. adults say they worry about being able to afford prescription drug costs.¹ That includes:

• Women who have chronic conditions or who are considered lower income are also more likely to struggle with the cost of prescription drugs.²
• Black and Latino older adults also typically have difficulty affording prescriptions at about 1.5 to 2 times the rate of white older adults.²

Here’s what you need to know to better understand how your plan’s drug list affects your medication costs — and how to help find savings opportunities along the way. 

A drug list (formulary) includes the medications your health plan covers and their cost. Covered medications usually cost less than those not covered by your plan.

The drug list categorizes drugs into groups called tiers -- and each tier has a certain cost level. You may have a fixed copay or coinsurance for each level. Drugs in lower tiers typically cost less. Higher tier drugs (Tiers 3, 4 and 5) have a steeper price tag, often have deductibles and typically require coinsurance after the deductible is met.

Tiers vary by health plan, but generally look something like this:

• Tier 1: Lowest cost generics
• Tier 2: Low to mid-range cost generics
• Tier 3: Preferred brand drugs and high-cost generics
• Tier 4: Non-preferred drugs, both brand and generic
• Tier 5: Specialty drugs

As with all aspects of your healthcare, you should feel empowered to understand what’s best for you and your health. Ask your doctor, pharmacist or health plan these questions:

• What drug are you prescribing for me?
• How long will I need to take it?
• Is this medication generic or brand name? Does my health plan cover it?
• Does my plan require prior authorization (pre-approval) or step therapy (trying other medications first to see if they work)?
• What tier is this medication on my plan’s formulary, and what is my cost?
• Is there a lower-tier option that would work for me?
• What are the medication’s benefits and side effects?

Your insurer’s website or member site will include its drug list for your specific plan. If your health plan offers an app, you may be able to manage medications on the go and use drug pricing tools from that platform. Understanding your coverage helps take the guesswork out of prescription costs.

To learn more, visit UHCMedicareNewsroom.com.