What Is a Formulary?
A formulary is your health insurance plan's list of covered prescription drugs. Every drug on the list is assigned to a tier, and your cost-sharing (copay or coinsurance) depends on which tier the drug is in.
Formulary Tiers Explained
- Tier 1 โ Generic drugs: Lowest cost, usually $5โ20 copay
- Tier 2 โ Preferred brand-name: Moderate cost, usually $30โ60 copay
- Tier 3 โ Non-preferred brand: Higher cost, usually $60โ100+ copay
- Tier 4 โ Specialty drugs: Highest cost, often 20โ33% coinsurance โ can be hundreds or thousands per month
๐ก Before choosing a health plan during open enrollment, look up your specific medications in each plan's formulary. The same drug can cost dramatically different amounts across different plans.
What If My Drug Is Not on the Formulary?
- Your plan may not cover it at all
- You can ask your doctor for a formulary exception โ your insurer may approve coverage if medically necessary
- Your doctor may be able to prescribe a therapeutic equivalent โ a different drug in the same class that IS on the formulary
- You can pay cash โ sometimes the cash price (especially with GoodRx) is lower than the copay
How to Check Your Formulary
Every insurer must make their formulary publicly available. Find it on your insurer's website, in the member portal, or request a copy. When comparing plans during open enrollment, always check that your medications are on the formulary โ and at which tier.
Calculate Your Out-of-Pocket Cost
Estimate your real costs including prescription expenses with our calculator.
Calculate Your Out-of-Pocket Cost โFrequently Asked Questions
Can a formulary change during the year?
Yes. Insurers can change formularies during the year with 30โ60 days notice. If a drug you take is removed from the formulary or moved to a higher tier, you have options including requesting a formulary exception or switching to a generic alternative.
What is a step therapy requirement?
Step therapy (also called fail first) requires you to try and fail on a cheaper drug before your insurer approves a more expensive one. For example, you might need to try a generic before getting coverage for a brand-name drug.
Does my copay for drugs count toward my deductible?
It depends on the plan. Many plans have a separate prescription drug deductible. Copays for drugs may or may not count toward your medical deductible. Check your plan's Summary of Benefits.