Formulary.
In plain English
A formulary is the list of prescription drugs your health or Medicare plan agrees to help pay for, usually sorted into cost tiers. Drugs not on the list are either not covered at all or cost you full price. Plans build their formularies with the help of pharmacists and doctors, and they can change the list, so a drug covered this year might move tiers or drop off next year. Most plans publish their formulary online so you can check before you fill a prescription.
01Why it matters
The same drug can cost you a small copay on one plan and hundreds of dollars on another, so the formulary is one of the biggest reasons two plans with similar premiums feel very different at the pharmacy counter.
02The math, step by step
Say you take a brand-name inhaler. On Plan A it sits on a low tier with a flat copay, so you pay a set amount each refill. On Plan B that same inhaler is not on the formulary at all, so you pay the full retail price out of pocket. Checking each plan's formulary for your actual prescriptions before you enroll can save you hundreds of dollars a year.
03What this is NOT
A formulary is which drugs are covered. The pharmacy network is which stores you can fill them at. A drug can be on your formulary but still cost more if you use an out-of-network pharmacy, and vice versa.
04Receipts
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Plain-English answers from our glossary. Receipts included. Never advice.
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