Main content
Course: The Brookings Institution > Unit 1
Lesson 1: Introduction to health care in the U.S.- Introduction to the U.S. health care system
- Medicare
- Medicaid
- The U.S. uninsured population
- Paying for medicines: copays and deductibles
- Paying for medicines: tiering and formularies
- Understanding your medical bill
- Health care costs
- Private health insurance
- Health care for the chronically ill
- Health care exercise
© 2024 Khan AcademyTerms of usePrivacy PolicyCookie Notice
Paying for medicines: tiering and formularies
In the second of two videos on paying for medications, the concepts of tiered drug pricing, preferred drug lists, and Medicare Part D are explained to shed some light on the issue. Created by Brookings Institution.
Want to join the conversation?
why doesn't medicare bargain for drug prices like the VA?(4 votes)
Short answer: Politics and lobbying.
In order for Medicare to negotiate lower prices, they would have to be willing to exclude certain drugs from being covered, which some citizens may not like, and many politicians may take advantage of. There are also powerful and well-funded lobbyists that have billions of dollars at stake.(4 votes)
Can a patient appeal the formulary (for example, if the preferred drug is contraindicated due to another condition that the patient has)?(1 vote)
Yes, patients can generally appeal the formulary list, but it is usually a complicated process where your chances of succeeding with your request are in the minority. However, here are two examples where you might be successful in your appeal: 1) You are allergic to the cheaper drug that is available on the formulary, so you need to get special approval for the more expensive drug that is not on the formulary. 2) You already have tried using the drugs available on the formulary and they were unsuccessful in treating/controlling your condition, so your physician requests that the more expensive non-formulary drug be given a chance to solve the problem. This 2nd example actually happened to our son where his case of athlete's foot was not treated successfully with the formulary drugs and after an appeal, we were granted permission to get a prescription for a more expensive non-formulary medication. Hope this helps. Good Luck.(6 votes)
How much should an insurance company be billed for the following compound if the compound was prepared in 30 minutes and the dispensing fee is $3.25?
Ibuprofen 10% cream 30 grams
Cost of ingredients = $1247(1 vote)
Let's say the studies are up for debate on which is more effective - the formulary drug or the non-formulary drug. The doctor recommends the more expensive non-formulary drug but the insurance company pushes the patient to get the formulary drug. This formulary drug worsens the condition. Are there any liability issues for the insurance companies? Do insurance companies have doctors on staff to determine what is a good alternative? Build up the formulary list?(1 vote)