Prescription Drug Coverage: What’s Covered, What’s Not, and How to Save

When you hear prescription drug coverage, the system that determines which medications your insurance will pay for. Also known as pharmacy benefits, it’s not just about whether your drug is covered—it’s about how much you pay, when you get it, and why some drugs are blocked even if your doctor ordered them. This isn’t magic. It’s rules. And those rules change depending on whether you’re on Medicaid, a government program that covers low-income individuals and families. Also known as state health assistance, it provides drug coverage in every state but with wildly different rules. Some states cover 90% of common meds. Others force you to try three cheaper drugs first—this is called step therapy, a cost-control tactic where insurers require you to use cheaper alternatives before approving the prescribed drug. If you’ve ever been told, "We’ll approve it if you try metformin first," that’s step therapy in action.

Then there’s the formulary, the official list of drugs your plan agrees to cover. Also known as preferred drug list, it’s not random. It’s built by pharmacy committees who weigh cost, safety, and clinical evidence. A drug might be safe and effective, but if a generic version exists and costs 80% less, the formulary will push the generic. That’s why your brand-name statin might be denied—but the generic version is approved. And here’s the catch: even if a drug is on the formulary, you might still need prior authorization, a process where your doctor must prove to the insurer that the drug is medically necessary before it’s covered. Think of it like a gatekeeper. Your doctor fills out paperwork. The insurer reviews it. Only then do you get the drug. No shortcut. No exceptions unless you appeal.

And then there’s the elephant in the room: generic drugs. They’re not second-rate. They’re the same active ingredient, same dosage, same safety profile. But because they cost less, insurers love them. In fact, over 90% of prescriptions filled in the U.S. are generics. That’s why so many posts here talk about switching safely, checking for manufacturing flaws, or understanding why your doctor says "Do Not Substitute." It’s not about brand loyalty—it’s about coverage. If your plan covers generics but not the brand, you’re paying the difference out of pocket. And if you’re on Medicaid, that difference could mean skipping doses or going without.

What you’ll find below isn’t theory. It’s real-world stuff. How to check if your drug is covered. How to fight a denial. How to use generics without risking your health. How Medicaid’s 2025 rules might change what you pay. How temperature, storage, and even lot numbers can affect whether your drug works at all. This isn’t about reading fine print. It’s about knowing what’s really happening behind the scenes—and how to take control before your next refill.