August 9, 2010
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
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.
Prior authorization is 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. 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.
Our Medicare insurance plan comparison tool can identify if an insurance plan has any drug limits for your prescribed medications.
