Everything You Need to Know About Prescription Drug Coverage

Prescription medications are a cornerstone of modern healthcare. Whether managing a chronic condition, curing an acute illness, or preventing disease, access to the right drugs can mean the difference between illness and good health, even life and death. However, the rising cost of medications is a significant concern for many. Without adequate coverage, even necessary prescriptions can break the bank.

Understanding how prescription drug coverage works, what’s included, and what to watch out for is critical for your health and wallet. Here’s everything you need to know about prescription drug coverage, considering a new health plan, or getting the most for your dollar. Plus, learn how Beem Health empowers you to find, compare, and save on prescription drug coverage like never before.

What Is Prescription Drug Coverage?

Prescription drug coverage is an insurance benefit designed to lower the cost of prescribed medications. This benefit may be included as part of a health insurance plan (often called “Rx coverage”), purchased as a standalone prescription drug plan (like Medicare Part D), or added as a supplemental rider.

With growing numbers of people taking regular medications for conditions such as diabetes, high blood pressure, depression, asthma, and more, drug coverage is becoming a non-negotiable feature of any comprehensive health policy.

Types of Prescription Drug Coverage

• Integrated into Health Insurance: Most employer, ACA marketplace, and Medicaid/Medicare Advantage plans include drug coverage.
• Standalone Plans: Medicare Part D policies or private Rx plans for those whose main health plan lacks adequate drug coverage.
• Supplemental Drug Benefits: Some health savings accounts (HSAs), health reimbursement arrangements (HRAs), or pharmacy discount programs can offset drug costs even further.

Beem Health’s digital platform simplifies exploring, comparing, and enrolling in the best plan for your needs—all in one place.

How Prescription Drug Coverage Works

Let’s break down the core mechanics of how your prescription benefits function.

Formularies and Tiers

Every drug plan maintains a formulary—a comprehensive list of the medications it covers. This list is generally divided into tiers, which directly affect your out-of-pocket cost.

• Tier 1: Most affordable, usually covering common generic drugs.
• Tier 2: Preferred brand-name drugs, at a moderate cost.
• Tier 3: Non-preferred brand names and some specialty drugs, typically at a higher cost.
• Tier 4 (Specialty): High-cost drugs for complex or rare conditions—often requiring extra steps before approval.

Why tiers matter: The higher a drug’s tier, the more you’ll pay, whether in copays (fixed dollar amounts) or coinsurance (a percentage of drug cost).

How Beem Health Helps

• Search and compare formularies to confirm your medications are covered.
• See each drug’s tier and estimate your out-of-pocket expenses for any plan.

Copays, Coinsurance, and Deductibles

• Copay: A set fee you pay for each prescription.
• Coinsurance: A percentage of the drug’s price that you pay.
• Deductible: Some plans require you to pay full price for prescriptions until you’ve met a set annual amount; coverage (and lower cost-sharing) kicks in after that.

Example: Suppose your plan has a $250 drug deductible, then $10 copay for generics and 25% coinsurance for preferred brands. For your first few prescriptions, you cover the full price. After you’ve spent $250, copays and coinsurance begin as you fill additional prescriptions.

Beem Health’s Value:

• Track your spending toward your deductible and out-of-pocket maximum directly within the app.
• Get upfront cost estimates for new prescriptions, so nothing surprises you.

Prior Authorization and Step Therapy

• Prior Authorization: Some drugs—especially new, expensive, or commonly abused medications—require your doctor to get approval from your insurer before they’ll pay.
• Step Therapy: Before covering a higher-cost drug, your insurer might require you first to try a lower-cost (often generic or preferred brand) alternative. Only if that fails will the pricey option be approved.

These measures help insurers control costs but can delay medication access unless navigated carefully.

How Beem Health Supports You:

• Guidance and notifications when prior authorization is needed.
• Step-by-step instructions and support for step therapy or appeals.
• Streamlined communication with your doctor to minimize delays.

What’s Typically Covered by Prescription Drug Plans?

Most respectable prescription drug plans cover a broad spectrum of medications needed to:

• Manage chronic conditions (diabetes, high cholesterol, asthma, hypertension)
• Treat acute illnesses (antibiotics, antivirals, pain relievers)
• Support preventive care (vaccines, statins)
• Address mental health concerns (antidepressants, antianxiety medications)
• Treat specialty conditions (cancer, autoimmune diseases, rare disorders)

Generic drugs are nearly always favored due to their low cost and effectiveness. Brand-name and specialty drugs are often covered but with more restrictions and higher costs.

Beem Health’s app and online tools instantly show you if your medication is part of a plan’s formulary (covered drug list) and alert you to better-priced alternatives if yours isn’t covered.

What’s Not Covered or Limited?

Unfortunately, no plan covers everything. Standard exclusions and limitations include:

• Cosmetic medications: Drugs for hair loss, weight loss, or erectile dysfunction (unless medically necessary) are usually not covered.
• Experimental or investigational drugs: Anything not proven efficacious or FDA-approved.
• Drugs with over-the-counter alternatives: Some prescription options are excluded if an OTC version is available and considered equivalent.
• Weight loss drugs: Often only covered when prescribed for specific diagnoses (like diabetes), not for general weight loss.
• Duplicate or excessive quantities: Strict refill limits or rules against early refills.
• Drugs excluded by “specialty tiers” or higher copay levels.

Beem Health provides transparent plan summaries so you know exactly what’s in and out—no surprises.

Key Features and Benefits of Prescription Drug Coverage with Beem Health

Choosing and utilizing prescription drug benefits should be easy, reliable, and valuable. Here’s how Beem Health makes this a reality:

1. Access to a Large Pharmacy Network

• Thousands of brick-and-mortar and mail-order pharmacies are covered, so you always have options—even when moving.
• Preferred pricing: Beem Health members can access exclusive discounts, local and national deals, and low-cost pharmacy partners.

2. Transparent Drug Cost Comparison

• Instantly compare drug prices across multiple plans, pharmacies, or generic alternatives.
• Identify the most affordable (and equally effective) formulations and brands—to save every time you fill.

3. Digital Tools for Tracking and Management

• Prescription tracker with refill reminders and alerts for expiring coverage.
• Visual dashboard for total medication costs, deductible progress, and near-instant feedback.
• Secure storage of prior authorizations, approvals, and appeal documents.

4. Special Offers, Coupons, and Savings

• Beem Health subscribers can access time-limited coupon codes, manufacturer discounts, and exclusive offers.
• Option to receive mail-order medications at lower costs for 90-day supplies.

Important Policy Terms to Know

To make the most of your benefits, you need to understand the basic terminology:

• Formulary: The official list of drugs covered by your plan. Always check the formulary before enrolling.
• Tier: The coverage level assigned to each medication determines your cost-sharing amount.
• Prior Authorization: Special approval required from your insurer before certain drugs are dispensed.
• Step Therapy: Requirement to try lower-cost drugs before higher-cost options will be approved.
• Deductible: The amount you must pay out-of-pocket before insurance coverage kicks in.
• Copayment / Coinsurance: Your share of drug costs (fixed amount or percentage).
• Out-of-Pocket Maximum: The most you’ll pay for drug costs within a plan year, after which insurance pays 100% for covered drugs.

How to Choose the Right Prescription Drug Coverage

1. Inventory Your Current Medications

Before shopping, list every medication (including doses and brand/generic) you and your family use regularly. This will help you check against each plan’s formulary.

2. Check Coverage and Formulary

• Confirm that all your medications are covered.
• Look for generic options (Tier 1) for maximum savings.
• Identify prior authorizations or step therapy rules up front.

3. Compare Costs

Analyze not just the premium, but also:

• Copays or coinsurance for each drug tier.
• Deductible and out-of-pocket maximum.
• Estimate your annual spending based on current medications.

4. Explore Mail-Order and Pharmacy Options

Mail-order services often offer substantial savings, especially for maintenance meds. Some plans have exclusive deals with preferred pharmacy networks.

5. Use Beem Health to Compare and Sign Up

Let Beem Health do the heavy lifting—its database compares your meds, usage, and local pharmacy rates to recommend the most cost-effective plan, and helps you enroll online.

Conclusion

Prescription drug coverage is vital for managing chronic and acute conditions effectively, but the fine print—including formularies, tiers, costs, and exceptions—can be overwhelming. Making wise choices about your plan and how you fill prescriptions can save you thousands each year and ensure you never skip needed care because of cost.

Beem Health is a cost-effective, secure, and user-friendly platform that ensures individuals have convenient and reliable access to essential healthcare services. Sign up for Beem Health — from the house of Beem, the personal finance app trusted by over 5 million Americans — today and discover easy and rewarding healthcare. Download the app here.

FAQs On Everything You Need to Know About Prescription Drug Coverage