Health Plans 101: Understanding Pharmacy Benefits
Pharmacy Benefit Terms
Deductible
This is the amount you must pay for covered health care and drugs before your health plan begins to pay. Your drug coverage may have a deductible that includes both drug and medical services costs. Or, your deductible may only count your drug costs.
Once you have met your deductible, your drug coverage provides benefits for covered drugs for the rest of the coverage period. Your share of the cost for each claim may include a copay or coinsurance. Your plan pays the rest of the cost of the drug.
Co-Payments (or CoPays)
This is a fixed amount you pay based on the category or tier your medicine is in. You can find this information on your Drug Formulary
Below is an example of how CoPays are related to Tiers
| Copay Tier | Example Copay | |
|---|---|---|
| Preferred Generics | 1 | $10 |
| Preferred Brands | 2 | $35 |
| Non-preferred (generics or brands) | 3 | $60 |
| Specialty Medications | 4 | $100 |
| Outcomes Benefit (drugs noted with RXO on the Formulary) | Outcomes | $5 |
Co-Insurance
This is the percentage you pay for a medication or service. For example, if your medication costs $100, your coinsurance of 20% would be $20. Since the prices of drugs can change, your cost share amount for that drug may change from time to time.
Out-of-Pocket Limit
Most plans include an out-of-pocket (OOP) limit. An OOP limit is the most you or your family will pay during a coverage period for covered charges. The coverage period for most plans is 12 months.
Within a family, there may be two types of OOP limits: individual and total family. Each individual in a family may have OOP limits. Once a family member has met the individual limit, that family member pays no OOP costs for the rest of the coverage period. There may also be family OOP limits. Once the entire family has met the family OOP limit, no one in the family will pay OOP costs for the rest of the coverage period.