Prescription Drug Coverage – General Information

A comprehensive insurance plan usually covers prescription drug coverage. But the world is facing a rise in drug prices overall, which compelled the insurance companies to restrict their coverage plans. They’ve set a limit on the number of coverages they provide in prescription plans. This shows that the citizens of America who have any public health insurance plans may have to bear the additional costs.

The CDC (Centers for Disease Control and Prevention) reported that 48.4% of adults used prescription drugs at least once in the last 30 days; 24% have used prescriptions three or four times in a month, and 12.6% have used the prescription drugs five or more times in a month. This means that the use of prescription drugs is increasing day by day, which is not a good sign for society as a whole.

Healthcare Reform

According to an analysis done by HealthPocket, before the  Affordable Care Act (ACA) was legalized, 20% of the family/individual health insurance did not cover prescription drug coverage. The ACA became effective in the same year it was enacted and set a level of essential health benefits, that includes prescription coverage for new and group health plans registering in and after 2014.

How a prescription drug coverage plan applies in an insurance policy?

The answer to the question varies with respect to the methods that health plans are covering prescription drugs; whereas the protocols related to prescription coverage modify from state to state. Various beneficial modules are there that can help health plans to cover prescription drugs.

Coinsurance

With this coverage, you have the leverage to pay a specific amount of the prescription cost and the rest of the cost will be covered by your insurance company. It is a 70/30 or 80/20 split, which means you will be paying 30 % or 20 % of the total amount until you met your deductibles, else you have to pay the full price of the treatments. Many coinsurance plans provide a percentage amount until you fulfilled your deductibles, after that they cover 100% of the prescriptions.

Copays

It can be explained as the fixed amount you pay after obtaining a particular healthcare service. For example, if you seek a medical service then you have to pay a fix amount against the services like $40 to the healthcare provider and $20 for prescription. As long as the requirements of your plans are being fulfilled, you will keep paying the copay fixed amount and the rest of the amount will be covered by your insurance company. Your specified copay amount will not be changed regardless of how much your doctor charges.

Copays generally come in tiers w.r.t. plan’s formulary. For instance, for Tier1/Tier2/Tier3 drugs, a plan may charge $10/$25/$50 respectively, with no other cost-sharing and deductibles.

Integrated Deductible

This includes prescription and medical expenses. Once you met your deductibles, coinsurance coverage will also be applicable.

Prescription Deductibles

The prescription deductible is different from the medical deductible and has to be fulfilled before you acquire medical insurance coverage. Once the prescription deductible is fulfilled, a copay coverage applies according to the tier. For instance, a prescription drug coverage may have a $600 prescription deductible, with the addition of a $3,500 medical deductible.

Out-of-Pocket Prescriptions

Unless the plan does not cover grandfathered or grandmothered, it will cover up to the level determined by the federal government for each year, that is $8,550 for one person and $17,100 for a complete family.

 Medicare

In contrast with the private health insurance coverages, Original Medicare (part A & B) does not cover prescription drugs. Medicare was founded in 2003 to provide the Medicare enrollees with prescription drug coverage that requires purchasing a prescription plan privately.

Medicaid

Medicaid is administered and controlled by states fulfilling the federal government requirements. Medicaid assists individuals and families with no or low income and comparatively fewer assets. Medicaid covers prescription drugs for these people in each state with the beneficiaries paying either less copay or nothing.

Stand-Alone prescription drug coverage

In many cases, stand-alone coverage denotes Medicare part D, which beneficiaries of Medicare purchase to enhance the advantages of Medicare prescription drug coverage plan. The advantages that do not come with the built-in Medicare Part D coverage. The plans are referred to as “stand-alone” as they are purchased by the beneficiaries themselves, except the health coverage plan. Usually, Original Medicare beneficiaries keep a Medigap plan from an insurer and a Part D plan from another.

However, there is no need to have a stand-alone plan if you own an ACA small group or compliant individual plan (grandmothered and grandfathered coverages can still be availed without the prescription drug plan). Moreover, states particularly do not have to include Medicaid plans in their prescription drug coverages, but still, almost all of the states are currently doing it.

Medicare Part D is the only true medical insurance, but if people are purchasing stand-alone prescription drug coverage, they might be purchasing the prescription discount program instead of the actual insurance plan.