Jeffrey Wade
There are different types of insurance cards, and they are used in different circumstances. Medical insurance cards cover medical expenses like doctor or hospital visits. Pharmacy benefit insurance cards, on the other hand, cover prescription medications. Sometimes, these benefits are included on one card, but often they are separate, with different identification numbers. Pharmacies typically require a pharmacy benefits card to process a prescription for medication, which contains an RxGroup, RxPCN, RxBIN number, and Member ID number. Medical cards usually only have a Member ID number. It is important to understand what is covered by your health plan and pharmacy benefits.
| Characteristics | Values |
|---|---|
| Purpose | To cover medical expenses (like the doctor or hospital) and pharmacy benefits (to cover medications) |
| Number of Cards | One card covering both medical and pharmacy benefits or two separate cards with different identification numbers |
| Pharmacy Requirements | Vary by plan. Some plans may require a specific pharmacy to provide deeper discounts on drug costs |
| Pharmacy Benefits Manager (PBM) | ExpressScripts, CVS Caremark, and OptumRx |
| Information on Card | Member ID, RxBIN, RxPCN, and RxGroup numbers |
| Information Sources | Information can be found on the insurance company's website, by calling the insurance company, or on the card itself |
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What You'll Learn
Medical and pharmacy insurance cards are separate
The two types of insurance cards serve different purposes. A medical insurance card covers medical expenses such as doctor visits and hospital stays. On the other hand, a pharmacy benefits insurance card, or prescription insurance card, covers medications and prescription drugs. While some people may have one insurance card that combines medical and pharmacy benefits, it is more common to have two separate cards with different identification numbers. Pharmacies typically require a pharmacy benefits card to process a prescription for medication.
The coverage provided by medical and pharmacy benefits can vary across different health plans. For example, employer-based, non-group individual coverage, Medicaid, and TRICARE manage health services under both pharmacy and medical benefits. However, some insurance companies choose to outsource the management of their pharmacy benefit to a separate Pharmacy Benefits Manager (PBM). This results in patients having separate medical and pharmacy benefit cards.
Additionally, the cost structure for medical and pharmacy benefits can differ. Under the pharmacy benefit, drugs are classified into different tiers based on cost, with lower-cost or generic drugs typically in Tier I and specialty medications in Tier IV, the highest tier. The higher the tier, the greater the out-of-pocket expense for the patient. Pharmacy benefits may also be subject to a deductible or maximum out-of-pocket separate from the medical benefit.
It is important for individuals to understand their health plan and pharmacy benefits to make informed decisions. Resources such as My Health Toolkit can help individuals determine what is covered by their plan and if they have a deductible. When choosing a health plan, considering the cost of any regular medication is essential. Understanding the Explanation of Benefits (EOB) process can empower individuals to speak up if there are discrepancies in how their health insurance is applied to medical bills.
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Pharmacy benefit managers (PBMs)
Pharmacy Benefit Managers, or PBMs, are companies that work with health insurers, large employers, and other payers to manage their prescription drug benefits. They emerged in the 1960s when US insurers began integrating prescription drug coverage into their plans. PBMs are negotiating entities that occupy a central role in the prescription drug supply chain, connecting drug manufacturers, payers, pharmacies, and patients. They help health insurance companies control costs, set prescription drug formularies, and process a large volume of prescription drug claims.
PBMs create and update formularies of preferred drugs, with different prices and cost-sharing amounts that influence what beneficiaries pay out of pocket and which medications they can access through their insurance. They negotiate rebates and discounts for an insurance plan from drug manufacturers and determine the prices insurers pay and the payments pharmacies receive. PBMs can also take on the administrative role of directly reimbursing retail pharmacies on behalf of an insurer. Both public and private insurers, including Medicaid, Medicare Advantage plans, employer-sponsored insurance plans, and individual market plans, use PBM services.
PBMs perform many functions within the prescription drug supply chain. They use their purchasing power to negotiate drug manufacturer rebates and other discounts on behalf of insurers and other payers. They create and maintain lists, or formularies, of covered prescription drugs for the insurance companies and other payers that contract with them. The design of formularies influences which drugs people can get through their insurance, whether patients are subject to utilisation management rules before they can access a drug, and what patient out-of-pocket costs are.
PBMs also contract with pharmacies to participate in networks managed by the PBMs, setting reimbursement terms for drugs dispensed to patients, and processing pharmacy claims for prescription drugs. They are one of the few parts of the prescription drug supply chain dedicated to lowering costs. PBMs help patients manage their prescriptions, find lower-cost alternatives, and stay on track with their treatments.
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Rx numbers
The RxBIN number is the most critical piece of information for pharmacies to identify a patient's insurance coverage. Rx numbers are not included on Medicaid insurance cards, which only include a Member ID. However, if you have a Medicaid managed care plan, you should still be able to access pharmacy benefits information.
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Coverage for specialty medications
Understanding coverage for specialty medications can be challenging. In the past, health services were covered under the insurance plan's "major medical" benefits, and the pharmacy benefit did not exist. Starting in the 1960s, insurance companies began providing coverage for prescription medication, creating a separate administrative structure for prescription drugs outside of major medical benefits.
Specialty medications are typically covered under the pharmacy benefit when the patient self-administers the medication at home. When covered under the pharmacy benefit, the insurance company's Pharmacy Benefits Manager (PBM) has control over how and when a patient can access their medicine. Patients may be subject to formulary restrictions, step-therapy, specialty pharmacy mandates, and copay accumulators. Under the pharmacy benefit, drugs are placed into a classification system of different tiers, with lower-cost or generic drugs typically in Tier I, and specialty medications mostly in Tier IV, the highest tier. The higher the tier, the greater the out-of-pocket expense for the patient. Coverage under the pharmacy benefit may also be subject to a deductible or maximum out-of-pocket separate from the medical benefit. Tier IV medications are also subject to more PBM utilisation management techniques, such as prior authorisation.
Specialty medication is covered under the medical benefit when the drug is administered by a healthcare professional in a hospital, physician's office, or infusion centre. Providers often use the “Buy and Bill” method, where the drug is purchased and kept by the provider, and the claim is billed to the insurance company after administration. For patients on Medicare, Part B is the medical benefit, providing coverage for most infused specialty medications. Part B covers drugs you wouldn't typically give to yourself, like those given in a hospital outpatient setting or doctor's office. Part B also covers drugs used with some types of durable medical equipment, such as infusion pumps or nebulizers, and injectable osteoporosis drugs.
It is important to understand your health plan and pharmacy benefits to know what is covered and if there is a deductible. Costs are rising for pharmacy drugs, especially in specialty areas, with fewer generic drugs available and more high-cost brand-name products. To help patients with chronic conditions, some plans require a 90-day supply of drugs to reduce the number of refills and trips to the pharmacy. If your insurance company won't pay for your prescription, you have the right to appeal the decision and have it reviewed by an independent third party.
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Understanding your health plan
There are several different types of insurance plans to choose from, and it is important to select the one that suits your needs. Firstly, you should consider whether you want an individual plan or a group plan. Individual plans are also known as Affordable Care Act (ACA) or Obamacare plans, and they are available to everyone. You can buy them through your state or federal marketplace, health insurance companies, or brokers. Group health insurance is usually provided through your employer, and you split the cost of your monthly premium with them.
There are four categories of health insurance plans: Bronze, Silver, Gold, and Platinum. These categories indicate how costs are shared between you and your plan. You pay a monthly premium to your insurance company, even if you don't use any medical services that month. You are also responsible for paying a deductible, which is the amount you pay for covered healthcare services before your insurance plan starts to pay. After you've met your deductible, your insurance typically begins to share the cost of services.
Some plans allow you to use almost any doctor or health care facility, while others limit your choices or charge you more if you use providers outside their network. Some plans may require you to get a referral from your primary care doctor to see a specialist.
When choosing a plan, it is important to consider your life stage and priorities. For example, young adults may prioritize affordability and basic coverage, while those in mid-life may require more regular healthcare services and comprehensive coverage. If you are starting a family, look for plans that cover prenatal care, childbirth, and pediatric care. Seniors should focus on plans that cover chronic conditions, long-term care, and a higher frequency of medical visits.
Additionally, understanding your pharmacy benefits is crucial. Coverage for prescription medication varies across different health plans. Some patients have a medical benefits card and a separate pharmacy benefit prescription drug card. You can use tools to understand what is covered and if you have a deductible. Before choosing a health plan, consider the cost of any medication you take regularly.
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Frequently asked questions
A medical benefit insurance card is used to cover medical expenses, such as doctor or hospital visits. This card usually only has a Member ID number.
A pharmacy benefit insurance card is used to cover prescription medication expenses. Pharmacies typically need this card to process a prescription for medication. This card contains an RxGroup, RxPCN, RxBIN number, and a Member ID number.
It depends on your insurance plan. Some people may have one insurance card that covers both medical and pharmacy benefits, while others may have separate cards for each type of benefit with different identification numbers. If you only have a medical insurance card, you can usually find your pharmacy benefits information online or by contacting your insurance company.
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