What are drug tiers and how do they impact cost sharing?

• A. Drug tiers categorize medications; higher tiers generally have higher copays/coinsurance
• B. Drug tiers indicate only the classification of drugs by color
• C. Drug tiers determine whether a drug is even available
• D. Drug tiers are the same across all plans without variation

Answer: (A)

Drug tiers are levels within a plan’s formulary that categorize medications by how much you pay at the pharmacy. This structure directly drives your cost sharing. Typically, generics sit on the lowest tier with the smallest copays or coinsurance, while higher tiers cover preferred brands, non-preferred brands, and specialty drugs and require higher copays or coinsurance. So, moving up a tier means paying more out of pocket for that drug. Tiers aren’t about color codes and don’t alone determine availability—the exact tiers and costs can vary from plan to plan, so a drug’s place on a tier and its price are plan-dependent.