All health insurance plan has a drug formulary, or list of covered medications.
Obviously, drugs not on that list are excluded, but the exclusions may include services
and miscellaneous fees related to drug benefits. Many excluded drug benefits are in the
cosmetic or nontraditional category. Drugs used for purely cosmetic purposes (like
hair-growth stimulants and supplements for clear skin or strong nails) are usually not
covered. Ditto for nontraditional drugs, like food supplements and experimental
medications, and drugs that are used to abort a pregnancy.
There are also some nonmedication exclusions in this category. For example, many workers stand in one position for hours, which can cause damage to the back and legs and result in more serious complications like deep-vein thrombosis. But insurance usually doesn't cover supportive garments and back braces. Most of these exclusions happen in both fee-for-service and managed-care plans, but there are differences.
Exclusions by Plan
Fee-for-service plans, or indemnity insurance, reimburse a set percentage of your health expenses and give you the freedom to select providers and hospitals. With this freedom often comes a higher monthly premium. Also, this type of insurance focuses more on the sick patient than on preventative care. Because of this, preventative care, such as annual physicals and "well" baby checkups, is often excluded.
Drug formulary exclusion lists are getting longer, making it more difficult for patients to access the medications and treatments they may need to manage their illnesses, according to a recent study from the Doctor-Patient Rights Partnership (DPRP).A drug formulary list is “a list of prescription drugs covered by a prescription drug plan or another insurance plan offering prescription drug benefits,” according to Healthcare.gov.A formulary exclusion list includes the drugs that an insurer, health plan, or pharmacy benefits manager (PBM) does not cover. Proponents of drug formulary exclusion lists say they quell costs by having patients use lower cost drugs. Ideally, patients should be using drugs that are the best value for their cost.
Drug formulary exclusion lists have increased by nearly 160 percent since 2014, the DPRP report found. In 2014, the combined number of treatments on CVS Pharmacy’s and Express Scripts’ drug formulary exclusion lists ran at 132 treatments. In 2018, that list has grown to 344.These skyrocketing drug formulary exclusion lists will likely have a negative impact on patient access to effective treatment, DPRP founding member Stacey Worthy said in a statement.
“Formulary exclusion lists can undoubtedly serve as important tools to help manage the skyrocketing cost of patient care,” explained Worthy, Executive Director of the Alliance for the Adoption of Innovations in Medicine (Aimed Alliance). “But, in some instances, these lists can also cause stable patients to lose access to their medications in the middle of their treatment regimens, resulting in adverse events. Therefore, formulary exclusion lists must be implemented carefully so as not to disrupt care.”
Both CVS and Express Scripts, which have the largest pharmacy market share per DPRP’s report, both predict that patients will need to adjust their medication access as a result of the growing formulary exclusion lists. About 275,000 patients will need to switch medications because of the exclusions, the health companies have said. To its credit, CVS has become the first PBM to allow cancer patients to remain on their treatments regardless of formulary exclusion list status, the report noted. Despite the benefits of this move, DPRP claims that the choice confirms that some medications on drug formulary lists are not equivalent alternatives.