Limits on Drug Coverage
Prior Authorization, Quantity Limits, & Step Therapy
Sometimes when an insurance company offers coverage for a specific medication they place conditions, or limits, on when this coverage will be offered. These drug limits are sometimes called "cost utilization measures." Drug limits are normally set on individual medications as opposed to every medication covered by the insurance plan. The three main categories of drug limits are:
- Quantity Limits
- Prior Authorization
- Step Therapy
Taking too much medicine or taking it too often can worsen your health condition and may increase your health care costs. For these reasons, private health insurance companies that offer prescription drug coverage sometimes set quantity limits. When a covered medication has quantity limits, the insurance company will only pay for a set amount of the medication within a 30-day period. If you attempt to refill a prescription before the end of the 30-day period or your doctor prescribes an amount higher than the limit, your drug will not be covered by your plan.
Certain drugs are more expensive than others and have more side effects, while others may have restrictions on how long they can be taken. To ensure that medications are used correctly, some plans require prior authorization. This refers to the procedure by which a doctor or pharmacist must first request approval for coverage of a particular medication with a drug limit before you may receive insurance coverage for the drug. This proves to the plan that the prescription is medically-necessary and therefore must be purchased. If an insurance company requires prior authorization on a specific medication and you do not receive this authorization before you get the prescription filled, you would be responsible to pay the full retail price of the medication.
Step therapy is a drug limit where one or more cheaper medicines must first be demonstrated as ineffective for a beneficiary's medical condition before the beneficiary may use a more expensive medication for the same condition. This program was designed for people with certain conditions, such as high blood pressure and high cholesterol, and requires them to take certain medications daily. Under Step Therapy drugs are grouped into categories based on cost: front-line drugs and back-up drugs. The front-line drugs are the generic, affordable drugs that should be tried first because they provide the same benefits as the more expensive, brand name back-up drugs.
Some programs may have no drug limits while others may have multiple. It is recommended that you research your prescription drug coverage on a regular basis to ensure that you are enrolled in the most affordable plan for your needs. Our Medicare insurance plan comparison tool can identify if an insurance plan has any drug limits for your prescribed medications.
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Medicare Advantage Plans, sometimes called "Part C" or "MA Plans," are offered by private companies approved by Medicare and provide Medicare Part A and Part B coverage. Medicare prescription drug coverage is insurance run by an insurance company or other private company approved by Medicare. A Medicare Supplement plan is a health insurance plan provided by a private company that fills in the "gaps" in original Medicare coverage.