Prescription Insurance Coverage Questions to Ask Your Plan

Knowing your prescription insurance covers your meds isn’t enough. You need to know exactly what’s covered, how much you’ll pay, and where you can get it - before you fill that first script. Too many people assume their plan works the way they expect, only to get hit with a $500 copay for a $200 pill or find out their pharmacy isn’t in-network. That’s not a mistake you should make.

Is my medication on the formulary?

Every insurance plan has a list of drugs it covers - called a formulary. This isn’t just a generic list. It’s broken into tiers, and each tier has a different price. Tier 1 is usually generic drugs, often $10 or less. Tier 2 is preferred brand-name drugs - think $40. Tier 3 is non-preferred brands - that’s where prices jump to $100 or more. Tier 4? That’s specialty drugs. These can cost hundreds or even thousands per month, and you might pay 25-33% of the total price as coinsurance.

Just because your drug is FDA-approved doesn’t mean your plan covers it. Some plans exclude certain brand-name drugs even if generics exist. Others only cover a drug if you tried a cheaper alternative first (step therapy). And some don’t cover certain medications at all - especially high-cost ones like cancer drugs or new diabetes treatments.

Don’t guess. Go to your plan’s website or call customer service. Ask: "Is [exact drug name and dosage] on your formulary? What tier is it on?" Write it down. Do this for every medication you take regularly - even if it’s over-the-counter in other countries. Insulin, for example, is covered by most plans now, but not always at the $35 cap yet. If you’re on Medicare Part D, use the Medicare Plan Finder tool and enter your exact drugs by NDC code. That’s the only way to get accurate pricing.

How much will I pay out of pocket before coverage kicks in?

Many plans have a deductible - the amount you pay before the insurance starts sharing the cost. Bronze plans can have deductibles as high as $6,000. That means if you take three maintenance meds a month, you could pay $1,200 out of pocket just to reach the deductible. After that, you still pay copays or coinsurance.

Gold and Platinum plans have lower deductibles - sometimes as low as $150 - but cost more in monthly premiums. If you take 12 or more prescriptions a year, a higher-premium plan often saves you money overall. CMS found that someone filling 12 maintenance drugs annually saves $1,842 a year on a Gold plan versus a Bronze one. That’s not a small difference. It’s the cost of a vacation, or a new tire for your car, or two months of your phone bill.

Ask: "What’s my annual deductible for prescription drugs? Does it reset each year? Is it separate from my medical deductible?" Some plans combine both. Others keep them separate. That changes how quickly you reach coverage.

Are there restrictions on my drugs?

Even if your drug is on the formulary, your plan might require you to jump through hoops. The two biggest are prior authorization and step therapy.

Prior authorization means your doctor has to get approval from your insurer before you can get the drug. This can take days or weeks. If your drug needs this and you don’t know, you might show up at the pharmacy with a prescription - only to be told you can’t fill it. In 2023, 28% of Medicare Part D prescriptions required prior authorization. For specialty drugs, it’s even higher.

Step therapy means you have to try cheaper drugs first. If those don’t work, then you can move up. For example, you might need to try three generic arthritis drugs before your plan covers the brand-name one. This can delay treatment and make your condition worse.

Ask: "Does my medication need prior authorization? Is step therapy required? What’s the process to get an exception?" If your doctor says a drug is medically necessary, they can appeal. But you need to know the rules before you start.

Which pharmacies can I use?

You can’t just walk into any pharmacy. Most plans have a network. If you go outside it, you might pay 37% more - or the plan might not cover it at all. CVS, Walgreens, and Walmart are common in-network pharmacies. But some plans only cover local independent pharmacies or mail-order services.

If you travel often or live in a rural area, this matters. If your pharmacy isn’t in-network, you might need to switch to mail order. Some plans offer free shipping for 90-day supplies of maintenance drugs. That’s a big help if you take the same pills every month.

Ask: "Which pharmacies are in-network? Can I use mail order? Is there a preferred pharmacy for my drugs?" Also ask if they cover online pharmacies like GoodRx or Blink Health - some do, some don’t.

What’s the coverage gap (donut hole) and how does it affect me?

If you’re on Medicare Part D, you need to understand the coverage gap - the "donut hole." In 2024, once your total drug costs (what you and your plan paid) hit $5,030, you enter the gap. You pay 25% of the cost until you hit $8,000 in total spending. After that, catastrophic coverage kicks in and you pay much less.

But starting in 2025, the donut hole disappears. The Inflation Reduction Act caps your out-of-pocket costs at $2,000 per year. That’s huge. If you take expensive drugs, this could save you thousands. But until then, you still need to track your spending. Some plans help you monitor this. Others don’t. Don’t assume you’re protected.

Ask: "Does my plan have a coverage gap? What happens when I reach it? Will I get help before 2025?" If you’re on Medicare, check your plan’s summary of benefits. Look for "coverage gap" or "donut hole." If it’s not clear, call them.

Can I switch plans if my meds change?

Life changes. You might get a new diagnosis. Your doctor might switch your meds. Your current plan might not cover the new drug. That’s why you need to know when you can change plans.

For Marketplace plans (like those from HealthCare.gov), you can only switch during Open Enrollment - November 1 to January 15. Outside that, you need a qualifying life event - like losing other coverage, moving, or having a baby. If you get a new prescription and your plan doesn’t cover it, you’re stuck until next year.

For Medicare Part D, you can switch during the Annual Election Period - October 15 to December 7. That’s your only chance to change unless you qualify for a Special Enrollment Period.

Ask: "When is the next time I can switch plans? What triggers a Special Enrollment Period?" If you’re on a Medicare Advantage plan with drug coverage, switching plans also changes your medical coverage. That’s a bigger decision.

What’s the out-of-pocket maximum?

This is the most you’ll pay in a year for covered drugs. After that, your plan pays 100%. Bronze plans have the highest - up to $9,450. Platinum plans cap at $3,050. If you take expensive drugs, this matters a lot.

One user on Reddit shared how they thought their Silver plan covered their $4,200/month specialty drug. They assumed the $500 copay cap applied - but it didn’t. They got billed $3,700 in one month. That’s because the cap only applies after you hit your out-of-pocket maximum. They didn’t know the difference.

Ask: "What’s my annual out-of-pocket maximum for prescription drugs? Does it include my deductible and copays?" Make sure you understand how this works. It’s not the same as your medical out-of-pocket max - unless your plan combines them.

Will my plan cover new drugs in the future?

New drugs come out all the time. Some are game-changers. Others are just expensive versions of old ones. Plans don’t always cover them right away. Some wait a year or more to add them to the formulary. Others add them but put them on the highest tier.

If you’re hoping for a new treatment - like a new weight-loss drug or a new MS therapy - ask: "Is this drug on your formulary? If not, when do you plan to add it?" If the answer is "We don’t know," that’s a red flag. You might be betting your health on a plan that won’t cover what you need.

How do I check my coverage before enrolling?

The best time to check is during Open Enrollment. Use the tools provided.

For Marketplace plans: Go to HealthCare.gov. Use the plan comparison tool. Enter your exact medications (name, dosage, frequency) and your preferred pharmacies. The tool shows you exactly what you’ll pay per month for each plan.

For Medicare: Use Medicare.gov’s Plan Finder. Enter your drugs by NDC code (found on the bottle). It compares all Part D and Medicare Advantage plans in your area. It even shows you which ones have the lowest total cost for your specific meds.

Don’t skip this step. A 2023 CMS survey found 63% of people didn’t check if their meds were covered until after they enrolled. 28% ended up switching plans the next year because of it.

Spending 20 minutes checking your coverage saves an average of $1,147 a year. That’s not a guess. That’s from a study by the Urban Institute. It’s worth your time.

What’s changing in 2025?

The rules are shifting. Starting in 2025, Medicare Part D will have a $2,000 annual out-of-pocket cap. Insulin will cost no more than $35 per month. And Medicare will start negotiating prices for 20 high-cost drugs - which could lower premiums by 10-15% by 2030.

That’s good news. But it doesn’t mean you can ignore your plan now. The changes are coming, but they’re not here yet. If you’re on Medicare, you still need to pick the best plan for 2024. And if you’re on a Marketplace plan, those caps don’t apply - yet.

Keep an eye on updates. But for now, focus on what’s real today. Your meds. Your costs. Your coverage. Don’t wait for the future to fix what you can fix now.

Knowing your prescription coverage isn’t about being picky. It’s about avoiding surprise bills, delays in treatment, and unnecessary stress. The system is complex - but you don’t have to navigate it alone. Ask the right questions. Use the tools. Compare your options. Your health - and your wallet - will thank you.