Understanding your insurance plan
How do your insurance plan benefits cover specialty medications? Specialty medications often cost more than other prescriptions. That’s because they require more complex research, development and manufacturing processes, and they may need special handling or storage.
Your plan also may require prior authorization (often called PA) before coverage for a specialty medication begins. Understanding how your insurance benefits work can help you avoid surprises and better plan for the cost of your treatment.
Here are a few common health plan terms and definitions to keep in mind:
| Health plan term | Definition |
Premium | The amount you pay to your insurance plan monthly to keep your health insurance active. |
Deductible | The amount you pay out of pocket each year for covered services before you plan starts to pay. |
Copay & coinsurance | The amount you pay for covered services. In most plans, you pay it after meeting your deductible. For prescription drug plans, it’s the amount you pay for covered medications. |
Explanation of Benefits (EOB) | A summary from your insurer that shows you what was charged, what your plan covered and what you may owe now. An EOB is not a bill. It’s just a report. |
Medication tier | Your plan’s list of covered medications and how they’re grouped. |
Prior authorization (PA) | A review process your insurance plan uses to make sure the medications you get are appropriate and medically necessary. |
What factors influence your out-of-pocket medication cost?
Your deductible, copay and coinsurance amounts, and medication tier all play a role in how much you pay out of pocket for your prescription.
What financial support options are available?
Depending on your medication and plan coverage, you may qualify for third-party financial assistance programs. These may help lower your out-of-pocket costs. Learn more about your options and how CVS Specialty® can support you here.
What are biologics, biosimilars and generic medications?
You may hear about different options to effectively treat your condition and help keep costs down. Here’s what these terms mean:
| Medication type | Definition | Key benefits |
Biologic | Complex drugs made from living and natural sources that make up most specialty medications | Established treatments backed by clinical data |
Biosimilar | FDA-approved medication that’s highly similar to the biologic | Typically costs less than the biologic with no clinically meaningful differences in safety or effectiveness |
Generic | Medications created to be the same as an already marketed brand-name drug in dosage, form, safety, strength, route of administration, quality, performance, characteristics and intended use | Typically lower-cost alternative to a brand-name medication |
Why biosimilars matter
Biosimilars are a newer option used to treat many complex conditions. They offer the same benefits as biologics and typically cost less. If you’re prescribed a biosimilar, you can trust it works the same way as the original biologic medication. Before approval, the FDA makes sure every biosimilar meets strict standards for safety and effectiveness. This means biosimilars are not only more affordable, but also reliable and safe. Talk to your prescriber to find the best option for your condition.
Your CVS Specialty CareTeam is also available to answer any questions about biosimilar options. You can find answers to frequently asked questions here.
This information is not a substitute for medical advice or treatment. Talk to your doctor or health care provider about your medical condition and prior to starting any new treatment. CVS Specialty assumes no liability whatsoever for the information provided or for any diagnosis or treatment made as a result, nor is it responsible for the reliability of the content.
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