A health plan usually helps to pay only for drugs included in the drug formulary. This enables the health plan to offer a wide range of medications at the lowest possible cost.
The health plan will dictate how much is paid for the drugs through a copay. In some cases, health insurance may completely cover the cost of the drugs.
How is a drug formulary divided?
Drug formularies are often divided into multiple tiers, with different medications included in each one. For example, Tier 1 drugs are often generic and have low copays, while Tier 3 drugs may consist of generics, preferred brands, and non-preferred brands with a higher copay. New drugs are often placed in higher tiers.
The tiers will vary based on the health insurance policy, and the drugs offered in each tier will also differ based on the policy.