Finding a suitable health insurance plan can be difficult for many consumers. However, obtaining reliable medical insurance with adequate prescription coverage requires even more due diligence. The problem lies in the fact that consumers taking several prescriptions are likely to have preexisting conditions or poor health. Poor health and/or several preexisting conditions may cause the insurance company to decline the application.
Editor’s Note: No longer can applicants be denied health insurance due to preexisting conditions.
Assuming the potential insured is in moderately good health, he or she will have several health plans with rx coverage to choose from. Those under age 65 and in the individual and family market can choose from traditional plans and health savings accounts. And those above age 65 or on disability can choose from several prescription Part D insurance plans.
Many plans cover generic drugs ($15 co-pay is most common) without the insured first reaching a predetermined deductible. Preferred name brand drugs and non-preferred name brand drugs usually have close to $25 and $50 co-pays respectively. However, in order to be eligible for the co-pay amount with name brand drugs, a predetermined deductible (not the policy deductible) will need to be met first. This amount is usually between $100 and $250 depending on the insurance carrier.
More recently, health carriers have also introduced a 4th tier. This tier usually includes the more expensive drugs or newer drugs that have just been approved. The insured will be responsible for a percentage of the cost of Tier 4 medications, usually 25%.
It should also be noted that many health insurance companies have a calendar year maximum in prescription benefit payouts. It is not uncommon for drug benefits to cease if the insured reaches $5000 in prescription benefits in a given year. However, some plans will allow, at an additional cost, a buy-up provision that has no maximum in yearly RX benefits.
Typically, health insurance plans coupled with a health savings account will offer no prescription drug coverage until the policy deductible has been met. This is unlike the traditional plans described above in that traditional plans have prescription specific deductibles unrelated to the overall policy deductible. HSA plans will only provide drug coverage when the policy deductible has been met. Health savings account plans are advantageous for health consumers who are not worried about immediate drug coverage and who also want to keep their premiums low.
When selecting a group health insurance plan for their employees, the administrator will usually have three or more prescription options to couple with their group policy. A simple way to describe plan offerings in the group market is high, medium, and low. Companies wanting to offer the best drug coverage will select a “high” coverage plan for their employees. Of course, the better the plan, the more expensive it will be for the group. Agents specializing in group health insurance will be able to provide information and descriptions of the options available from various insurance carriers.
Part D plans are the result of recent legislation from the federal government separating prescription coverage from Medicare and Medicare supplement insurance. There are several insurance carriers offering plans to consumers on Medicare and/or Medicare disability. Most companies offer three plans to choose from and each plan will have a different deductible and/or co-pay for generic and brand name drugs. Usually, consumers can use online software to determine which plan is best for them based on their prescription needs. In fact, www.medicare.gov allows consumers to compare plans with almost all carriers offering Part D coverage.
In summary, when consumers are most concerned with prescription drug coverage, it is best to compare several plans with a knowledgeable agent. Health polices can differ greatly in the amount of benefits provided, when the benefits begin, and when the insured has reached the maximum in benefits. Learning limitations on benefits and purchasing an appropriate plan can eliminate potential problems in the future.
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Category: Health Insurance