15 December Matthew Brown 12 Comments

Switching Health Plans? How to Check Generic Drug Coverage to Save Money

Switching Health Plans? How to Check Generic Drug Coverage to Save Money

When you switch health plans, your monthly premium might drop-but your medication costs could spike. Many people don’t realize that generic drug coverage varies wildly between plans, even within the same insurer. A plan that looks cheaper overall could end up costing you hundreds more each year just for your daily pills. This isn’t guesswork. It’s about knowing exactly how your prescriptions are covered-and where to look before you sign up.

Why Generic Drugs Matter More Than You Think

Generic drugs make up 90% of all prescriptions filled in the U.S., but they only account for 23% of total drug spending. That’s because they’re just as effective as brand-name drugs but cost far less. Insurance companies know this. That’s why they design their formularies-lists of covered drugs-to push you toward generics. But not all generics are treated the same.

In most plans, generics are split into tiers. Tier 1 is the cheapest. Tier 2 and higher cost more. Some plans even have five tiers. If your medication moves from Tier 1 to Tier 3 when you switch plans, your copay could jump from $5 to $40. That’s not a small change. For someone taking three maintenance meds a month, that’s over $1,000 extra per year.

How Formularies Work: Tiers, Deductibles, and Hidden Costs

Most health plans use a tiered system for drugs. Here’s what you’re likely to see:

  • Tier 1: Preferred generics. Usually $3-$20 for a 30-day supply. Often covered before you meet your deductible.
  • Tier 2: Non-preferred generics or brand-name drugs with generic alternatives. Copays of $20-$50.
  • Tier 3: Non-preferred brand-name drugs. $50-$100+.
  • Tier 4 and 5: Specialty drugs-even if they’re generic versions of complex medications. Coinsurance of 20-30%.
The real trap? Deductibles. In many plans, especially high-deductible health plans (HDHPs), you have to pay the full medical deductible before any drug coverage kicks in. But not all plans work that way.

Silver Standardized Plans (SPDs) on the Health Insurance Marketplace are different. They waive the deductible for Tier 1 generics. That means even if your deductible is $2,000, you still pay only $20 for your metformin or lisinopril. KFF found that consumers on these plans save $1,500-$5,000 a year compared to those on non-standardized plans.

Medicare Part D vs. Private Plans: What’s the Difference?

If you’re on Medicare, things get more complicated. Medicare Part D plans have a base deductible of $505 in 2023, but most plans lower or eliminate it for generics. Preferred generics often cost $0-$10 after the deductible. But here’s the catch: not all generics are created equal in Medicare.

Some plans label certain generics as “preferred” and others as “non-preferred,” even if they have the same active ingredient. For example, levothyroxine from Manufacturer A might be Tier 1, while the exact same drug from Manufacturer B is Tier 2. That’s because insurers negotiate deals with manufacturers. You don’t get to choose. But you can find out.

Medicare Advantage plans with drug coverage (MA-PDs) often have lower out-of-pocket costs than standalone Part D plans. But only if your drugs are on their formulary. A 2022 Medicare analysis showed MA-PDs saved beneficiaries 18% on average-but only for those taking multiple drugs. If you only need one generic, the difference shrinks.

People interacting with holographic drug formularies at a nighttime healthcare marketplace kiosk.

State Rules Change Everything

Where you live affects your drug costs more than you think. California requires a $85 outpatient drug deductible before coverage starts, then charges 20% coinsurance (capped at $250). New York, on the other hand, waives the deductible for generics entirely and caps copays at $75 for specialty drugs. In D.C., there’s a separate $350 drug deductible with a $150 cap on specialty meds.

KFF’s 2023 state analysis found that states with separate drug deductibles-like California-had 22% higher adherence rates to generic medications. Why? Because people knew exactly what they’d pay. No surprises. States without these rules leave consumers guessing.

What to Check Before You Switch

Don’t just look at premiums. Don’t just glance at the plan’s summary. You need to dig into the formulary. Here’s exactly what to do:

  1. Get the full formulary list-not just the tier breakdown. Look for your exact drug name and manufacturer.
  2. Check the formulation. Is it immediate-release metformin or extended-release? Some plans cover one but not the other.
  3. Verify your pharmacy. Is your local pharmacy in-network? OptumRx found that using a non-preferred pharmacy can triple your generic drug costs.
  4. Calculate your annual cost. Multiply your monthly copay by 12. Add any deductible you’ll need to meet. Don’t forget mail-order options-they’re often cheaper.
People who complete all four steps reduce unexpected drug costs by 73%, according to CMS data. That’s not a small margin. That’s life-changing savings.

Tools That Actually Work

You don’t have to do this alone. Here are the best tools, tested and trusted:

  • Medicare Plan Finder (medicare.gov): Lets you enter your drugs and see exact out-of-pocket costs across all Part D plans. Used by over 4 million people in 2022.
  • Healthcare.gov Plan Selector: Filters plans by your medications and shows tier-specific costs. Best for Marketplace plans.
  • Insurer-specific formulary search tools: Blue Cross, UnitedHealthcare, and Humana all have detailed online formularies. Accuracy rates? Up to 96%.
  • eHealthInsurance’s prescription calculator: Processes 1.7 million queries a month. Great for comparing multiple plans side by side.
A 2023 study by the National Institute for Health Care Management found that people who used these tools paid 32% less out of pocket for prescriptions.

Individual reviewing prescription costs at a kitchen table at dawn, marking savings on paper forms.

Common Mistakes That Cost You Money

Most people make the same three mistakes when switching plans:

  • Assuming all generics are equal. Metformin from one maker might be $5. Another maker’s version? $40. Same drug. Different tier.
  • Ignoring pharmacy networks. Your plan might say your drug is $10-but only if you use CVS. If you go to Walgreens, it’s $45.
  • Not checking for changes. Insurers update formularies every January. Just because your drug was covered last year doesn’t mean it will be this year.
Reddit’s r/healthinsurance community tracked 147 cases in 2023 where people got hit with surprise costs after switching. Sixty-three percent of those cases involved a generic drug moving from Tier 1 to Tier 2-because the manufacturer changed.

What’s Changing in 2025 and Beyond

The Inflation Reduction Act capped insulin at $35/month starting in 2023. By 2025, Medicare Part D will have a $2,000 annual out-of-pocket cap on all drugs. That’s huge.

But there’s also more complexity coming. Starting in 2025, Medicare will split generics into two tiers: Tier 1 (preferred) and Tier 1+ (non-preferred). This could make formularies even harder to read.

Meanwhile, 32 states now offer Silver SPD plans with $10 generic copays before the deductible-up from 24 in 2023. Experts predict that by 2027, 80% of Marketplace plans will eliminate integrated prescription deductibles because consumers keep getting burned.

Final Advice: Don’t Guess. Verify.

Switching health plans is about more than premiums. It’s about your daily medication costs. A $100/month savings on your premium means nothing if your blood pressure pill jumps from $5 to $40. You can’t rely on customer service reps to get it right. You can’t trust the plan’s one-page summary.

Take 30 minutes. Use the Medicare Plan Finder or Healthcare.gov tool. Enter your exact drugs. Compare the total annual cost-not just the monthly premium. Look at the formulary. Check your pharmacy. Do this before you enroll. It’s the single most effective way to save money on your health care.

Generic drugs are the most cost-effective part of your treatment. But only if your plan covers them right. Don’t let a paperwork oversight turn your savings into a surprise bill.

How do I know if my generic drug is covered by a new health plan?

You need to get the full formulary list from the plan-not just a summary. Search for your exact drug name and manufacturer. Some plans list generics by brand name, others by generic name. Make sure the formulation (like extended-release or immediate-release) is also listed. If you can’t find it, call the insurer’s pharmacy help line and ask for the formulary code.

Are all generic drugs the same in terms of cost under insurance?

No. Two identical generic drugs-same active ingredient, same dosage-can be in different tiers based on the manufacturer. Insurers negotiate deals with drug makers. One version might be preferred (Tier 1, $5 copay), while another is non-preferred (Tier 2, $40 copay). Always check the manufacturer name on your prescription and compare it to the plan’s formulary.

Do I have to meet my deductible before generic drugs are covered?

It depends on the plan. In most high-deductible plans, yes. But Silver Standardized Plans on the Health Insurance Marketplace waive the deductible for Tier 1 generics. You pay a flat copay (usually $20 or less) even if you haven’t met your deductible. Medicare Part D plans also often cover generics with little or no deductible. Always check the plan’s drug coverage details.

Can I save money by using mail-order pharmacies for generics?

Yes, often significantly. Mail-order pharmacies usually offer 90-day supplies at lower copays than retail pharmacies. For example, a $10 copay at CVS might be $5 for a 90-day supply through mail order. But make sure the mail-order pharmacy is in-network. Some plans restrict which mail-order providers you can use.

Why did my generic drug cost more this year even though I didn’t switch plans?

Plans update their formularies every January. Your drug might have been moved from Tier 1 to Tier 2, or the manufacturer might have changed. Insurers often switch to lower-cost manufacturers mid-year. Even if the drug name is the same, the maker matters. Always check your formulary at the start of each year.

What should I do if my drug isn’t covered at all by my new plan?

You can request a formulary exception. Contact your insurer and ask for a prior authorization or an exception based on medical necessity. You’ll need a letter from your doctor explaining why you need that specific drug. If denied, you can appeal. Some states also have patient assistance programs for drugs not covered under insurance.

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12 Comments

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    Dylan Smith

    December 16, 2025 AT 08:30

    Just switched plans last month and got hit with a $40 copay for metformin when it was $5 before. No one warned me. Don't trust the premium numbers. Always check the formulary.

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    Souhardya Paul

    December 16, 2025 AT 21:25

    This is so true. I spent months trying to figure out why my blood pressure med suddenly cost triple. Turned out the manufacturer changed and the plan moved it to Tier 2. Took me calling pharmacy support three times to get the real formulary list. The website summary is useless. Always ask for the full PDF.

    Also, don't assume your pharmacy's price is the plan's price. I went to Walgreens thinking I was covered, but my plan only discounted at CVS. Ended up paying $50 extra that month.

    And if you're on Medicare, use the Plan Finder tool religiously. It shows you exactly which generics are preferred and which aren't. Even if the drug name is the same, the maker matters. One levothyroxine brand is $3, another is $35. Same active ingredient. Same pill. Just different negotiations.

    My advice? Print out your current formulary. Print out the new one. Side by side. Highlight every med you take. Do this before you sign anything. It's the only way to avoid getting screwed.

    And yes, mail order saves money. I get 90-day supplies for half the price. But only if it's in-network. My plan only uses OptumRx. If you try to use another, you pay full price.

    Also, check every January. Insurers change formularies like they change socks. Last year my thyroid med was Tier 1. This year? Tier 3. No notice. Just a surprise bill.

    People think switching plans is about saving on premiums. It's not. It's about not getting killed on meds. A $100/month premium drop means nothing if your daily pills go from $15 to $120.

    I wish I'd known this before I enrolled. Now I'm stuck for a year. Lesson learned the hard way.

    Use the tools. Don't guess. Verify. Always.

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    Kitty Price

    December 17, 2025 AT 11:18

    So many people don't realize how much this matters 😔 I had to switch plans last year and my insulin went from $0 to $35. Not a big deal for some, but for me? That's a whole grocery budget gone. Thank god for the Inflation Reduction Act.

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    Colleen Bigelow

    December 18, 2025 AT 10:32

    They don't want you to know this because it exposes how the whole system is rigged. Insurance companies don't care about your health-they care about profits. They'll make you pay $40 for a generic just to squeeze a few more bucks out of you. And the government lets them. They call it 'formulary management' but it's just price manipulation disguised as efficiency.

    And don't get me started on how they switch manufacturers behind your back. One day your metformin is covered, next day it's not. No warning. No choice. Just a bill you didn't expect.

    This isn't healthcare. It's a casino. And you're the sucker.

    They'll tell you to 'use the tools' like that fixes anything. But the tools are built by the same companies that designed the scam. You're just being given a better-looking shovel to dig your own grave.

    Real solution? Single-payer. Or nothing. Until then, you're just gambling with your life.

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    Billy Poling

    December 19, 2025 AT 11:46

    It is of paramount importance to underscore the necessity of a comprehensive and meticulous review of the formulary documentation prior to the formalization of any health plan enrollment, as the variance in tiered pricing structures for generic pharmaceuticals can result in substantial fiscal disparities across ostensibly comparable plans. Moreover, the presence of differential manufacturer-based formulary allocations, which are often opaque and subject to dynamic renegotiation, introduces an element of unpredictability that renders reliance upon summary documentation or automated tools inherently inadequate. It is further imperative to verify the inclusion of one's preferred pharmacy within the plan's network, as out-of-network dispensing can result in cost escalation exceeding threefold, and to consider the potential advantages of mail-order pharmacy utilization for 90-day supply regimens, which, when appropriately coordinated, may yield significant cost efficiencies. The assertion that premium reduction equates to overall savings is not only misleading but potentially financially catastrophic for individuals reliant upon chronic medication regimens, and thus, a granular, itemized analysis of anticipated out-of-pocket expenditures for all prescribed medications, inclusive of deductible thresholds and copay structures, is not merely advisable but indispensable.

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    SHAMSHEER SHAIKH

    December 21, 2025 AT 00:57

    Brother, I am from India, but I have seen my sister-in-law struggle with this in the US. I told her: 'Do not trust the website. Do not trust the rep. Do not trust the 'summary'. Go to the formulary PDF. Search every drug. Write it down. Check manufacturer. Check pharmacy. Check mail order. Do this before you click 'Enroll'. You will save thousands.' She did. Saved $2,100 last year. I am so proud of her.

    Also, if you are on Medicare, use the Medicare Plan Finder. It is not perfect, but it is the best tool we have. And if your drug is not covered, ask for exception. Get a letter from your doctor. They will sometimes approve it. Do not give up.

    Health is not a luxury. It is a right. And you have to fight for it.

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    Aditya Kumar

    December 22, 2025 AT 16:50

    Yeah whatever.

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    Randolph Rickman

    December 24, 2025 AT 14:13

    I used to think premiums were everything until I got hit with a $1,200 bill for my cholesterol med. Now I treat formularies like a treasure map. Every January, I sit down with my meds, my old plan, and my new plan. I compare every single one. I even check if my pharmacy changed. I use the Medicare Plan Finder and Healthcare.gov side by side. I save hundreds every year. It takes 30 minutes. It’s worth it.

    And yes, mail order is a game-changer. I get my 90-day supply for $15 instead of $45. No brainer.

    You don’t need to be a genius. You just need to be a little careful. Don’t be like me-learn the hard way.

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    sue spark

    December 26, 2025 AT 03:43

    I just switched and didn't check. My anxiety med went from $5 to $45. I cried in the pharmacy. Now I know. Please don't make my mistake. Look at the formulary. Even if you think you know your drug, check the manufacturer. That's what changed for me.

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    Tiffany Machelski

    December 27, 2025 AT 14:41

    so i just switched plans and thought my pill was covered but it wasnt and i paid 60 bucks and i was so mad and now i check everything but i still miss stuff like the pharmacy thing and the mail order thing and i keep forgetting to check january so yeah

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    James Rayner

    December 29, 2025 AT 03:35

    There’s something deeply human about how we treat health care like a puzzle we’re supposed to solve alone. We’re told to ‘do your research,’ but the system is designed to be confusing. The formularies aren’t meant to be understood-they’re meant to be navigated by those with time, privilege, or connections.

    I used to think if I just worked harder, read more, called more people, I’d win. But I didn’t win. I just got exhausted.

    What if the problem isn’t that we’re not trying hard enough? What if the system is broken? And we’re just being asked to be better at surviving it?

    I still check the formularies. I still use the tools. I still save money. But now I do it with grief. Because no one should have to be this clever just to afford their medicine.

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    Josias Ariel Mahlangu

    December 30, 2025 AT 08:37

    This is exactly why America is failing. People are being exploited by corporations and the government lets it happen. You have to be a lawyer just to understand your own health plan. This isn't freedom. This is exploitation dressed up as choice. And you think you're saving money by switching plans? You're just choosing which scam you want to be a part of.

    If you were in a real country, you'd have universal coverage. No tiers. No formularies. No manufacturer games. Just medicine. But here? You're a customer. Not a patient.

    And you're being told to 'use the tools' like that fixes anything. It doesn't. It just makes you feel like you're doing something while they keep taking your money.

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