If your medication prices seem higher than last year, one culprit might be changes to your insurance company’s “formulary”—the list of drugs covered by your health plan.

During the year, insurance plans may change which prescription treatments they cover, and that’s true especially when it’s time to re-enroll.

Formularies are often developed to encourage people to use the least expensive medications whenever possible. But that list can change if an insurer negotiates a better deal with a drug company, if new research shows the medication isn’t as safe or effective as thought, or a less expensive generic version of the drug hits the market.

Even if your drug is covered on an insurance company’s formulary, the full cost of it may not be. Where an insurance company places a drug on its formulary, the list of drugs is further divided into what is called a ”tier”—and it’s essentially a way to determine how much you’ll pay out of pocket for it, through your co-pay. The higher the tier the higher your share of the costs.  

"Consumers need to be on guard because drugs can be taken off a formulary at any time, or moved to a higher tier, which could make a big difference in your share of the costs," says Betsy Imholz,  Consumers Union's director of special projects.

Most plans have about four levels, or tiers, of coverage, but in the last few years, more insurers have added a fifth tier by splitting the "generics" tier into two: "preferred" and "nonpreferred." Insurance companies do this to encourage people to choose less expensive medications.

Your copay for a drug in the non-preferred generic tier, for example, may be $15, compared to a preferred generic in the lowest tier, where your copay could be $5 or less. 

Diligently checking your plan's formulary (you can find it on your insurer’s website) can help you avoid getting stuck with paying the full costs of your prescriptions. But if it turns out a drug you're taking is dropped or moved to a higher tier, you have several options:

1. Switch Drugs. Ask your doctor to prescribe a drug on your formulary that may be just as effective and safe for your condition. Most plans will offer one or more alternatives to a medication they no longer cover.

2. Ask for an Exception. "Many people don't realize that just because a drug is not on your plan's formulary does not mean it's unavailable for coverage," says Imholz, "Work with your doctor."

If a drug alternative is not possible, your doctor can file an exception, or "prior authorization," through your health plan, requesting that the drug be covered because it’s medically necessary. If that happens, your plan should approve or deny your request within a few days. 

3. Try Step Therapy. Depending on what medication it is, after your doctor files an exception, some plans may require that you agree to “step therapy” first, which is a type of prior authorization. It means trying other lower-cost medications that are appropriate for your condition first. If the lower-cost drug doesn’t work for you, your doctor can ask your insurer to cover the more expensive drug. 

4 ways to get your insurance to cover prescription drugs

4. File an Appeal. If your insurer still denies your request to cover a drug you need, you can file an appeal. You and your doctor can either complete and file an appeals form provided by your insurer, or write a letter that includes the name of the drug, why you need it covered, and any other supporting documents from your doctor. Your insurer's website will provide more details on the appeals process. 

If your plan denies your appeal, you can file for an external, or independent, review with your state’s insurance regulator, which will make the final decision.

If your state doesn’t have an external review mechanism, the Department of Health and Human Services (HHS) or an independent review organization will oversee the process. A decision can take up to 60 days and is free if handled by the HHS, but may cost you to $25 if it’s handled by your state or an independent review organization.

When All Else Fails, Shop Around

Filing an appeal can be a lengthy process, and there’s still no guarantee that your insurer will agree to cover your medication. If you end up having to pay more for your medications out-of-pocket, shop around. 

Our secret shoppers have found that prescription prices can vary widely from one pharmacy to the next, even in the same zip code. Costco often offers low prices (you don’t have to be a member) and independent pharmacies may be able to negotiate. And ask your pharmacist if you can save more by not using your insurance; many chains and big-box stores, such as Target, Walgreens, and Walmart, offer hundreds of generics for as low as $4 for a 30-day supply and $10 for a 90-day supply.

When it's time to re-enroll or change insurance plans, before choosing coverage, Imholz recommends checking the formulary to make sure the drugs you need are covered and under which tier.

Editor's Note: These materials were made possible by a grant from the state Attorney General Consumer and Prescriber Education Grant Program, which is funded by a multistate settlement of consumer fraud claims regarding the marketing of the prescription drug Neurontin (gabapentin).