Understanding Your Pharmacy Benefits

If you have drug coverage as part of your health plan, you may see these kinds of charges
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Deductible

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 Co-Pays)

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 Co-Pays 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

Examples of common benefits are described. Your employer may have purchased a plan that is a modification of the listed descriptions.

Co-Insurance

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 limit. An out-of-pocket 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 out-of-pocket limits: individual and total family. Each individual in a family may have out-of-pocket limits. Once a family member has met the individual limit, that family member pays no out-of-pocket costs for the rest of the coverage period. There may also be family out-of-pocket limits. Once the entire family has met the family out-of-pocket limit, no one in the family will pay out-of-pocket costs for the rest of the coverage period.