What is a formulary in the context of health plans?

• A. The plan's approved list of drugs; brokers verify medications against it
• B. A list of preferred hospitals in the network
• C. A schedule of premium payments
• D. A guide to non-drug services coverage

Answer: (A)

A formulary is the health plan’s approved list of prescription drugs that are covered under the plan, often organized into tiers that determine your out-of-pocket costs. This list guides which medications the plan will pay for and at what level of cost sharing, helping to manage costs while aiming to ensure safe and effective therapy. Brokers verify medications against the formulary to confirm coverage and estimate what a member will pay; if a prescribed drug isn’t on the formulary, alternatives or prior authorization may be needed. The other options describe different concepts—network/provider directories for hospitals, a billing schedule for premiums, and coverage of non-drug services—none of which define a formulary.