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Your Health Insurance: Tierful Prescription Drug Coverage?

For most individuals, it’s open enrollment season. Bombarded with words like deductible, coinsurance and formulary, employees will be comparing their employer sponsored plan offering with an eye towards selecting an alternative, better coverage for 2015. An employer may only offer one plan; another employer several. One important component that is present in almost all employer plans is a prescription drug benefit and a tier formulary benefit.

Many employer sponsored plans have had a tier prescription drug program that includes three or more tiers. Generic drugs are usually in the lower tiers: often as little as $5 for a 30 day supply. Over time, plan participants have become more savvy when routine medications are available with a possible generic substitute.

Sadly, this doesn’t mean that a physician no longer will prescribe a brand name drug. In fact, new brand name drugs are regularly prescribed for diseases such as rheumatoid arthritis, multiple sclerosis and cancer. According to a May 2014 report from the IMS Institute for Healthcare Informatics, the average cost for brand name cancer drugs has doubled in the last decade to $10,000 for a month’s supply . In addition to brand names, specialty drugs are the fastest growing component of the prescription drug marketplace. And although your plan includes a prescription drug plan, these drugs may be found on the highest tier or on no tier at all.

Most participants must use a step therapy program before reaching the highest tier in a plan. Step therapy requires that patients first try medications that may be on a lower tier before moving to a specialty drug. With each tier comes a higher employee copayment or coinsurance. Ultimately, the drugs can become cost prohibitive for a participant.


It may be impossible to predict what drugs you or your family may need in 2015. However, if your employer offers a menu of health insurance plans, it does make sense to take an inventory of your family’s ongoing prescription medications. Each year, tiers are revised and your medications may move to a different tier. If your doctor is considering a particular medication, you may want to check the different plans’ tiers to see if it is covered.

For additional information, contact EAB HealthWorks.