Why aren't all drugs covered by insurance?

Why aren't all drugs covered by insurance?

A formulary is the list of prescription medications covered by a health insurance plan. The list typically has brand-name and generic options. In addition to medications, a formulary can also include other products and technologies, such as diabetes supplies and digital therapeutics.

Health plans develop formularies to provide enrollees access to treatments for a full range of conditions that will improve health outcomes. But when selecting these medications, insurance companies also factor in the cost of covering a particular drug.

Research by GoodRx, a platform for medication savings, found that formularies are shrinking across insurance plan types. A smaller share of available drugs are covered by health plans — and those that remain are more likely to be subject to restrictions, such as prior authorization.

Sometimes, a treatment that once appeared on your formulary can get removed unexpectedly during the year. Read on to see why these changes happen and what you can do if your medication gets dropped by your plan.

Key takeaways:

* A formulary is a list of prescription medications, products, and technologies covered by a health plan. The covered drugs will include brand-name and generic options. A formulary typically doesn't cover every prescription medication that's available on the market.

* While you may have chosen your insurance plan because of its drug list, a formulary can change at any time during the year. That means a medication you have been prescribed can be dropped from coverage.

* Drugs can be removed from a formulary for many reasons. This can happen if a new treatment or a more affordable option — such as a generic or biosimilar — becomes available.

Why is your insurance no longer covering certain medications?

There are many reasons why your insurance plan may no longer cover a medication. For each plan year, the formulary is published — usually prior to open enrollment — to help consumers choose a health plan that's best for them. What many people don't realize is that throughout the year, the list of prescription options can be continually updated. Here are some reasons why your formulary may no longer include a medication, product, or technology:

* Newer medications have become available

* A more affordable option hit the market, such as a generic or biosimilar

* An FDA drug safety concern has arisen or the agency has updated a medication's label or usage guidelines

* Clinical guidelines have changed to recommend a different treatment for a condition

* A health plan or its pharmacy benefit manager has negotiated a better price or discount with a medication manufacturer

* Cost to the health plan may have changed

* A low number of enrollees were prescribed the medication

How do you find out if a drug has been dropped?

Insurance plans are required to notify enrollees about formulary changes. This includes commercial insurance plans, Affordable Care Act (ACA) plans, Medicare Advantage plans, and Medicare Part D plans. Medications that have FDA safety concerns, or those that are removed from the market, are taken off formularies immediately, and enrollees are informed. Otherwise, the notification must come at least 60 days before the formulary change is effective or when the enrollee requests a refill. Then, you are eligible for a 60-day supply. In some cases, your health plan will continue covering a dropped drug until the end of the year.

What drugs are not usually covered by insurance?

Not all medications appear on every formulary. Certain medications are more likely to be omitted. Drugs that are not usually covered by insurance can include:

* Cosmetic treatments, including medications for nonmedical hair loss

* Erectile dysfunction treatments

* Fertility treatments

* Medications not approved by the FDA for sale in the U.S.

* Over-the-counter products

* Weight-loss medications not used to treat other conditions, such as Type 2 diabetes or severe cardiovascular conditions including heart attack and stroke

Why are insurance plans dropping GLP-1s?

Glucagon-like peptide-1 (GLP-1) receptor agonists manage blood glucose, but some are also approved to help people lose weight. Ozempic (semaglutide), Victoza (liraglutide), and Mounjaro (tirzepatide) treat Type 2 diabetes. But Wegovy (semaglutide), Saxenda (liraglutide), and Zepbound (tirzepatide) are versions of those medications that are used for weight loss.

Cost management is the main reason insurance plans are dropping GLP-1 medications or deciding to deem fewer of them as "preferred" medications. An insurance plan also can determine that one GLP-1 medication is medically necessary, while another is not.

GoodRx is tracking GLP-1 insurance coverage changes and providing trend updates as they happen.

What can you do when insurance denies coverage for your medication?

If your prescription plan won't cover a medication, you have options that include:

* Talking to your prescriber about alternatives

* Asking your prescription plan for an exception

* Applying for a patient assistance program

* Reconsidering your prescription coverage during open enrollment

* Filing an appeal

If you file an appeal, follow your insurance plan's appeal process, which may include sending an appeal letter as well as forms handled by your prescriber. You can request an independent review by a third party if your appeal is turned down.

The Medicare Part D appeals process may vary depending on whether you have a standalone plan or prescription coverage included in a Medicare Advantage plan.

How often can you expect formulary changes?

Formulary changes can happen at any time. Coverage changes are especially common for high-cost medications and specialty drugs.

The bottom line

Your formulary is a living document that can change during the coverage year. A medication, product, or technology you need can be dropped at any time. Across insurance plans, prescription coverage is becoming less comprehensive and more restrictive.

Your prescription plan should notify you if your treatment is dropped from the formulary. When this happens, you have options. Sometimes, you are eligible for a final 60-day refill or coverage until the end of the year. Otherwise, you can talk to your prescriber about alternatives, ask your plan for an exception, or file an appeal.

This story was produced by GoodRx and reviewed and distributed by Stacker.