What Is a Formulary?
A formulary is your insurance plan's approved list of prescription drugs. Every ACA-compliant plan — marketplace and private — must cover at least one drug in every therapeutic category, but which specific drugs and how much you pay varies by plan.
Formulary Tiers (Typical Structure)
- Tier 1 — Generic drugs: $5-$15 copay. Lowest cost. Most common medications.
- Tier 2 — Preferred brand: $25-$50 copay. Brand-name drugs the insurer has negotiated discounts on.
- Tier 3 — Non-preferred brand: $50-$100 copay. Brand-name drugs without preferred pricing.
- Tier 4 — Specialty drugs: 25-40% coinsurance. Biologics, cancer drugs, rare disease treatments. Can cost $1,000+ per month even with insurance.
Before choosing a plan: If you take prescription medications, look up your drugs on each plan's formulary before enrolling. A plan with a $50/month lower premium but your medication on Tier 3 instead of Tier 1 could cost you more overall. Most carrier websites have a formulary search tool.
What If Your Drug Isn't on the Formulary?
If your medication isn't listed, you have options: ask your doctor about a formulary alternative, request a formulary exception from your insurer (your doctor must justify medical necessity), or choose a different plan that covers your drug.
Related Terms
Last updated: March 30, 2026.
