Health and Prescription Medicine Insurance

Finding Coverage and Working With Your Carrier

The health and prescription medicine insurance market in the United States is complex. Finding the best policy for your situation can be a challenge. This page provides an overview of the sources of health and prescription medicine coverage and provides links to additional information. Also included is information on how to determine if a prescription medicine plan includes coverage for a particular medication and the amount of the copay.

Sources of Health Insurance Coverage

There are four primary ways of obtaining health insurance coverage:

  1. Employer-provided coverage (including corporations, the military, and state/federal government employee programs)
  2. Veterans Health Administration for qualified veterans
  3. Government-provided health insurance programs for low income, retired or disabled individuals
  4. Individual or small business owner policies purchased through state ACA Health Insurance Marketplaces (also known as Obamacare) or the private policy market (purchasing a policy directly from an insurance company)

This table lists federally funded programs providing health care coverage for those who meet specific qualifications:

Veterans Health Administration (VHA)If you have any military service, you may qualify for health and burial benefits from the Veterans Administration (VA). Reservists and National Guard members activated for federal duty can qualify for a number of health care benefits. In addition, some reservists who are never called to active duty may qualify for some VA benefits. Go to VA Health benefits or call 877-222-8387 for more information on qualifying for VA Healthcare benefits.
Medicaid and the Children’s Insurance Program (CHIP)Medicaid and the Children’s Health Insurance Program (CHIP) provide free or low-cost health coverage to millions of Americans, including some low-income people, families and children, pregnant women, the elderly, and people with disabilities. More info: Medicaid/CHIP.
Medicare at retirementMedicare for retirees begins at age 65. Even if you still work after age 65, you must enroll in Medicare within specific time windows. More info:, Medicare Plan Finder Tool, and Your Guide To Medicare Prescription Drug Coverage
Medicare for those qualifying for Social Security Disability Insurance (SSDI)SSDI is a federal government program providing income and Medicare coverage to people who have been working but are no longer able to work due to a disability. If you want to know if you may qualify for this program, please see our Disability Planning web page.
Medicaid for those qualifying for Supplemental Security Income (SSI)SSI is a federal government program providing income and Medicaid coverage to people with limited financial resources who have no or limited work history due to a disability. If you want to know if you may qualify for this program, please see our Disability Planning web page.
Medicaid + Medicare for those qualifying for both SSDI and SSIIt is possible to qualify for both the SSDI and the SSI programs. In this case, health insurance coverage is provided by both Medicare and Medicaid. For more info please see our Disability Planning web page.

Some states have programs that provide benefits to low-income or disabled individuals in addition to federal programs. To find out more, the Medicaid office or website for your state is the best place to start.

If you do not have health insurance coverage from an employer and do not qualify for state and federal programs, you may purchase a policy either through the ACA Health Insurance Marketplace or directly from an insurance company.

Purchasing an Individual Plan Through the Marketplace or Direct From an Insurer

The Affordable Care Act established minimum requirements for a health insurance plan to be considered a “Qualified Health Plan.” An insurance plan that’s certified by the ACA Health Insurance Marketplace provides essential health benefits, follows established limits on cost-sharing (like deductibles, copayments, and out-of-pocket maximum amounts), and meets other requirements under the Affordable Care Act such as covering pre-existing conditions. All qualified health plans meet the Affordable Care Act requirement for having health coverage, known as “minimum essential coverage.

The ACA Health Insurance Marketplace is a resource where individuals, families, and small businesses can:

  • Compare health insurance plans for coverage affordability.
  • Get answers to questions about your health care insurance.
  • Find out if you are eligible for tax credits for private insurance or health programs like Medicaid or the Children’s Health Insurance Program (CHIP).
  • Enroll in a health insurance plan that meets your needs.

All policies offered through the Marketplace are Qualified Health Plans, meeting the minimum essential coverage requirements of the ACA. The Marketplace is available online at You can also contact the Marketplace by telephone, 24 hours a day, 7 days a week at 1-800-318-2596 (TTY: 1-855-889-4325).

Some states offer Marketplace policies through, but others have their own websites. To find the correct website for your state, follow this link: Where to get coverage in each state.

The federally funded State Health Insurance Assistance Program (SHIP) consists of 15,000 trained counselors who provide free advice on finding insurance coverage. Each state has its own SHIP offices, and you can find yours on their website. SHIP counsellors generally review all of the plans available in your area and can help you figure out which one best meets your needs.

Warning: Beware of insurance plans that are not ACA Qualified Health Plans! Often called “junk” plans, these policies do not meet the requirements of the Affordable Care Act, so they may not cover pre-existing conditions or have other coverage limitations such as very low annual or lifetime limits. While all policies sold through the ACA Marketplace are compliant with the minimum requirements of the Affordable Care Act, it can be very difficult to tell whether a policy sold outside of the ACA Marketplace is compliant. If a plan you are considering is short-term or much cheaper than a Marketplace plan, these are red flags that you may be getting much less coverage than you need. This NPR article has more information on the dangers of these plans.

Be especially careful if you are considering buying an insurance policy directly from a carrier or website that is not the federal Marketplace ( or the official Affordable Care Act website for your state. In recent years, some states have allowed carriers to sell ACA-compliant plans on their own websites. By pulling consumers away from official Marketplace websites and managing the presentation of information, these insurers can mislead shoppers into purchasing policies that do not include ACA protections or cause shoppers to miss out on subsidies or Medicaid coverage, or pay more for a plan that is available for a lower premium from another carrier. This article explains how these direct enrollment processes work and the risk of being guided towards the policies that are highly profitable for insurers and brokers, but often the worst solution for you and your family.

Some individuals and families in complex situations choose to use brokers or agents to purchase individual or small business policies directly from insurance companies instead of through the Marketplace. Brokers can assist in finding insurance coverage from several insurance companies, while agents tend to represent a single company. These individuals have specialized knowledge of state laws, strategies for insuring both businesses and individuals, and handling unusual situations such as coverage for individuals residing in more than one state. Brokers and agents usually offer both ACA-Qualified Health Plans and plans that do not qualify. Brokers and agents receive commissions from insurance carriers but may also charge fees. Brokers and agents may receive higher commissions for selling policies that are not Qualified Health Plans. While there are situations where the advice of a broker or agent can be valuable, be careful when considering any plan that is not an ACA-Qualified Health Plan.

Is My Medication Covered? Checking if Your Medicine Is on the Formulary.

Every prescription medicine insurance plan has a list of medicines covered by the policy, which is called a formulary. If a medicine is on the formulary, it will be assigned to a specific “tier”. Each tier has a different formula for determining the amount you will pay for the medicine. Information on the payment formula for each tier will be in the plan description. In general, medicines in the lower tiers will have $0 or low out-of-pocket costs. Medications in higher tiers have higher copay or coinsurance amounts.

If you are choosing between different insurance companies and prescription medicine plans, it is important to know whether the company and plan you are considering covers the medicines taken by you and your family and the formula that determines your out-of-pocket cost. There are three ways of finding information about formularies.

  1. If you live in one of the 38 states using for Affordable Care Act policies, then you can research whether your medicine is on a formulary within that tool. When you’ve progressed through the application steps and have reached the web page showing all of the available plans, look for a button “Add your prescription medicines” to view the plans that cover your medicines. You can also click on a particular plan to see the details and scroll down to click on the “prescription medicine coverage” section. Within this section is a pdf of the list of covered medicines and an explanation for how much you will pay for medicines in specific tiers.
    If you live in a state that maintains its own Marketplace website, you should be able to access the formula in a similar fashion. Once you reach the web page showing all of the available plans, look for “details”, “pharmacy”, “medicine list” or other links on each plan that will take you to the formulary.
  2. If you are considering a specific plan offered by your employer or broker, you can usually find the formulary by googling the plan name plus the word formulary. For example, if your plan name is “FEP Blue”, you would google “FEP Blue formulary”, which would lead you to this website for FEP Blue, describing the formulary, the tier structure, and a link to the formulary documents.
  3. If you want to find all of the formularies for specific types of insurance in your state, you can use On this site, you may input the name of the medicine, your state, and the channel (commercial, Medicare, State Medicaid, Health Exchange, Managed Medicaid) of the insurance you are researching. You will see a graph showing the breakdown of coverage for all plans in the state and a list of insurers. By clicking on an insurance company’s name, you can see a detailed list of all of the prescription medicine plans offered by that insurer and the coverage status for the medicine under each plan.

Insurance companies may update their formularies often, sometimes even in the middle of a plan year. Medications may be added, removed, or moved to a different tier. Formulary changes may result in “non-medical switching”, which means that patients are moved to a new medication for financial reasons, not medical reasons.

If these changes are made mid-year and you have a Medicare Part D plan, your insurer may need to continue covering your medication for the remainder of the plan year. The policy stating that Medicare recipients experiencing mid-year formulary changes should be allowed coverage of the medicine for the remainder of the plan year can be found on this Medicare Rights Center web page.

The regulation for non-medical switching governing types of insurance other than Medicare Part D depends upon whether the policy is regulated by the federal government or by the department of insurance in your state. If your insurance is provided by your employer in a “fully-insured plan” (meaning that the employer buys the policy and the insurance company pays the claims directly), then this plan is governed by the insurance department in that state. Policies purchased through the Affordable Care Act (ACA) Marketplace are also regulated by state departments of insurance. If the insurance provided by your employer is in a “self-funded plan” (meaning that the employer, not the insurance company, pays the claims directly), that plan is regulated under federal law and state laws do not apply. If you do not know the type of plan offered by your employer, ask your human resources representative.

For insurance policies regulated by state departments of insurance, the requirements for continuing coverage for the remainder of the year following a non-medical formulary change depend on state law, so you may need to do some investigating into the specific law in your state. A good place to start is, which tracks non-medical switching laws by state. As there are no federal laws governing non-medical switching, insurers governed by federal insurance law do not have to provide coverage for the remainder of the plan year after making mid-year changes to a formulary.

Insurers commonly make changes to the formulary at the beginning of each plan year. It is good practice to check the formulary every year at re-enrollment time to make sure your medications are still covered.

This article by Consumer Reports, “When Your Insurance Drops Your Prescription Drug”, explains how formulary changes are becoming increasingly common and strategies to try if it happens to you. For more information on formulary exception requests and appeals, go to HF’s Health and Prescription Medicine Insurance Denials and Appeals web page.

Copay Accumulators and Maximizers

If you are using a prescription medicine coupon, copay card, or copay assistance program (coupon) to help pay for your medications, it is important to know whether your health and prescription medicine insurance policy includes a “copay accumulator” or “copay maximizer” program. These programs, which are rapidly being implemented in many insurance policies, may significantly increase your out-of-pocket expense for your medication and/or healthcare.

Copay accumulator programs change the way an insurance company applies and accounts for payments from a medicine manufacturer’s coupon. If your insurance does not have a copay accumulator, the contributions from the coupon go toward fulfilling your out-of-pocket obligations, including your deductible and out-of-pocket maximum. Your annual total out-of-pocket expense for healthcare and medication will be decreased by the value of the coupon you use.

However, if your insurance company implements an accumulator program, the coupon’s contributions, though still accepted at the pharmacy, will no longer go toward fulfilling your deductible and other out-of-pocket costs. Instead, all money paid by your coupon will go directly to the health insurance company, not making a dent in your deductible or going toward your out-of-pocket obligations.

Then a “Copay Surprise” may happen. If/when your coupon runs out, the next time you fill your prescription you may be charged the full amount because according to the insurance company, you have not paid the full amount of your deductible or reached your out-of-pocket maximum. You will continue to pay out of pocket for prescriptions and any other health care services until you have fully paid the plan’s out of pocket maximum. It may be a good idea to keep track of your coupon’s expiration date (if any) so that you can request a new coupon in advance.

Copay maximizer programs allow you to use coupons and spread the value of the coupon evenly throughout the year. Like accumulator programs, the value of the coupon is not credited towards your deductible or out-of-pocket maximums. If you have any other health care claims during the year, you will pay out of pocket until your deductible and out-of-pocket maximums have been met. The value of the coupon in reducing your out-of-pocket costs is lost.

For more detailed explanations of how copay accumulators and maximizers work and may affect your total cost for healthcare, check out the following links:

  • This GoodRx article explains accumulator programs and recommends calling your insurance company to find out if they have an accumulator or maximizer program. 
  • The National Hemophilia Foundation has produced a short video showing how an accumulator program works and how it affects people who need high cost medications.
  • The National Hemophilia Foundation also sponsored an hour long webinar which includes detailed explanations of how both accumulator and maximizer programs work and the effect on patients’ out of pocket costs. (Note: This webinar is the best resource for learning how accumulator and maximizer programs work and includes excellent illustrative examples. We highly recommend that anyone using coupon programs for expensive specialty medications watch this video.)

Some states have passed laws imposing curbs on accumulator programs. Is it important to know that only ACA Marketplace policies and certain state-regulated policies (employer-provided policies that are fully-funded by the insurance company) are required to follow state law. Many employer policies are self-funded (claims costs are covered by the employer, not the insurance company) and governed by federal ERISA* regulations, which do not prohibit accumulator or maximizer programs, even if they are operating in a state that has regulated such programs. (As of 2020, 67% of covered workers are in self-funded plans. Ask your employer whether your insurance policy is fully-funded or self-funded.) Laws differ among states, and may only apply to certain medicines or certain types of programs. To find more detail on the law in your state, google “(state name) copay accumulator law”.

Because insurance company documents are often vague and the laws governing policies in each situation are so complex, we strongly recommend that if you use copay assistance or coupon programs, you should call the insurance company and ask about their programs before you buy their policy. Some experts advise calling companies more than once to see if you get the same answer each time, just to be sure. If you have a choice between a low or high deductible policy, the inclusion of a copay accumulator or maximizer program may significantly change the total amount you will pay for health care under each policy.

* ERISA: Employee Retirement Income Security Act, which governs most employer-provided group insurance plans

Prescription Medicine Insurance Coverage for Compounded Flumazenil

Compounded flumazenil will not be on the formulary of any insurance company. It is not FDA-approved for the treatment of idiopathic hypersomnia (IH) or any other central disorder of hypersomnolence. However, as with any medication approved by the FDA, physicians can choose to prescribe flumazenil “off-label” for indications other than that for which it is approved. This includes the use of flumazenil for the treatment of IH and related disorders. Because flumazenil is currently approved in liquid form for IV use, it must be formulated into a transdermal cream or lozenge—for topical or mucosal absorption, respectively—by what is referred to as a compounding pharmacy for use by people with IH and related disorders.

As of 2021, only two compounding pharmacies provide flumazenil in the U.S.:

If you are able to afford to pay cash for a small trial of flumazenil, it may be prudent to first determine if the medication is helpful for your symptoms. If so, then it is more likely to be worth your time and energy to pursue reimbursement from your insurer for both the initial trial and ongoing costs.

Many insurance companies will not pay for this medication to treat IH; however, a few will do so, often as part of their coverage for compounded medications. For more information on appealing an insurance company denial for flumazenil, please see Flumazenil Appeals.

You may be able to find further information via support groups, such as Facebook’s Flumazenil for Hypersomnia.

Managing Prescriptions and Prior Authorizations

In an ideal world, your doctor writes a prescription, the insurance company processes the claim and issues approvals, the pharmacy fills the order and soon a friendly text tells you it’s ready to pick up. Unfortunately, people with hypersomnias rarely have this experience! Because our medications are often controlled substances, specialty medications, or dispensed from specialty pharmacies, the complex, multi-step prescription fulfillment process often breaks down. When this happens, only you can resolve the issue by contacting your doctor, your insurer, and the pharmacy until the problem is resolved. It is prudent to request your prescription as early as possible (both new prescriptions and renewals) and try to fill your medication as soon as possible after receiving the prescription, as this process may take significant time. Whenever you change insurers, it is a good idea to immediately start the process of filling all of your usual medications.

Many medicines for IH and related sleep disorders require prior authorization from your insurance company. Your doctor must request prior authorization from your insurer. Do not assume that your prior authorization request has been received by your insurer just because your healthcare provider says they have submitted it. Call your insurer and confirm the receipt.

If your pharmacy informs you that they are waiting for a prior authorization before they fill a prescription, do not assume that your pharmacy or insurer will take care of communicating prior auths/appeals to your doctor, even if they say they will. Inform your doctor yourself. Keep contacting your insurer and your pharmacy (or ask a friend/family member for help) to verify that the doctor’s office has sent the required information to the insurer and that the prior authorization has been received by the pharmacy. Make it a priority to check on the process daily until it’s resolved.

Our most important tip when managing prescriptions and prior authorizations is to ALWAYS request urgent/expedited processing. Ask the insurance company how to submit an urgent prior authorization request or for information on expedited processing, then contact your doctor’s office and tell them how to use the urgent/expedited request process. There is no time to lose when you are running out of a medication you need.

You may also need to ask your doctor which ICD-10 diagnosis code they are using for the prior authorization, as this can significantly affect approval. (For example, if you have both a diagnosis of IH and of narcolepsy type 2, it is often better to use an NT2 diagnosis code if the medication is FDA-approved for narcolepsy but not IH).

Once your prior authorization is approved, mark your calendar with the approval dates. You will need a new prior authorization when the current one expires, and you’ll want to get started on it early enough to ensure there is no interruption in your medication approval/availability.

The above advice applies to procedures as well as to prescriptions. For example, if your doctor orders a sleep study or schedules a surgery, you may need to communicate and coordinate with your insurance company to ensure that it will be covered or that prior approval is given if needed.

It is possible that the insurance company will refuse to issue prior authorization, in which case you will receive a denial letter or be placed into a step therapy program. If this happens, go to our Health and Prescription Medicine Insurance Denials and Appeals web page for information on how to request an exception or file an appeal.

Professional Patient Advocates

Professional patient advocates provide information and assistance to patients as they navigate the health care system and interface with health insurers. Before working with a patient advocate, it is important to know who they work for, their motivations for working on your case, and how you can work most effectively with them.

The Alliance of Professional Health Advocates describes the services of private patient advocacy providers in this article. Private patient advocates work for you, with the goal of maximizing the effectiveness of your care and reducing your out-of-pocket costs and minimizing billing and insurance reimbursement mistakes. The patient pays for the service. It may make financial sense to hire a private patient advocate if the medical needs are complex, involve multiple doctors, or costs are very high.

In an effort to improve outcomes while reducing costs, insurance companies are employing “care management” strategies focused on high cost patients. Sometimes these services are labelled patient advocacy services. Regardless of the name of the program, if you choose to work with an advocate from the insurance company, know that one of their primary concerns is lowering the cost of your care. A care manager may be able to find opportunities to improve or coordinate care, especially in complex cases, to the benefit of the patient. That said, we recommend careful consideration of any proposals from an insurer-provided care manager to guard against losing medically necessary and effective care.

Additional Resources


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