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New Year, New Insurance Formularies
Most insurance plans update their formularies at least once each year, with changes typically taking effect on January 1. When an insurance company updates its formulary, it may add new medications to the covered list, remove medications that were covered in the prior year, change which drugs are considered “preferred,” move medications to different cost tiers, or add or remove prior authorization or step therapy requirements.
The tier system generally ranges from Tier 1 (generic, low cost) to Tier 5 (specialty, very high cost), with out-of-pocket costs increasing as the tier level rises.
Even if a resident’s insurance plan remains the same, medication coverage can change due to these updates. Insurance companies review formularies to account for newly FDA-approved medications, promote lower-cost or generic alternatives, adjust coverage based on utilization and safety data, and align with negotiated pricing agreements.
While these changes can help control costs, they can also affect medication access if not identified early. New formularies may result in increased scrutiny of medications and additional steps required to obtain insurance approval for refills.
In the long-term care setting, this can lead to delayed refills when new approvals are required. It may also cause unexpected medication changes, increased out-of-pocket costs, and additional administrative work for healthcare teams.
Red Rock Pharmacy regularly monitors formulary updates and helps identify medications affected by coverage changes. When appropriate, we recommend covered alternatives and coordinate prior authorizations with prescribers to help keep medication delivery consistent and uninterrupted.
Understanding formulary updates early in the year helps reduce surprises and supports smoother medication management throughout the year. One helpful strategy as we enter the new year is to begin ordering medications a few days earlier. This allows time to identify formulary changes and work through insurance requirements so residents do not miss any doses.
We remain committed to providing the highest level of service and delivery throughout these ongoing changes. Together, we will adapt and move forward successfully into the new year.
Dave Rimlinger
Director of Marketing
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