Reimbursement: speaking the language

Baffled by some of the terms you've seen or heard while looking into medication reimbursement? Here's a quick guide to understanding some common medication reimbursement terms. Many drug insurance plans will use these words, and understanding them will help you get a better handle on your insurance coverage.

Terms describing the type of drug insurance plan

Formulary: This type of plan covers only a specific list of medications. The insurer (which may be a government program or an insurance company) decides which medications should be on this list by consulting experts and considering the impact that each medication may have on the plan. This list of medications is also called a formulary, and may differ between plans.

Open access: This type of drug insurance plan pays for all prescription medications that have been approved for sale by Health Canada. It covers these medications as long as they are used outside of a hospital setting and prescribed by a licensed doctor.

Terms describing payment

Cap: Many drug plans set a maximum amount that they will cover in a given time period. This maximum amount is called a cap. Some plans have yearly caps, while others have a lifetime cap.

Co-pay: Also called co-payment, this term refers to the amount of the drug costs that you will be responsible for paying. For some plans, this is a percentage, such as 10% to 20% of the total cost of the prescription. For others, it may be a fixed amount, such as $2 per prescription.

Deductible: Like car and home insurance, many drug insurance plans have a deductible, which is a fixed amount that you will need to pay before your insurance starts to help with the payments. Deductibles are usually calculated by the year, so you will have a fixed amount to pay each year before your insurance starts covering some of the costs.

Other useful terms

Coordination of benefits: People who have more than one drug insurance plan can sometimes use the second plan to pay for costs that are not covered by the first plan. This process is called coordination of benefits. For example, if you have coverage through your own workplace and through your spouse's employer, your spouse's plan may cover drug expenses that your own plan does not cover.

Coverage: A general term to describe which medications your drug insurance plan will pay for, how much you will need to pay, and how long the plan will continue to cover these medications.

DIN: DIN stands for Drug Identification Number. DINs are issued by Health Canada after it carefully reviews the product's ingredients, supporting documents, and usage instructions. Once a medication has a DIN, it can be legally sold in Canada. The DIN is found on the label of all prescription and over-the-counter drugs approved for sale in Canada. You may need to provide a product's DIN when communicating with your drug insurance company to find out about your coverage.

Special authorization: Some plans may cover certain medications only under limited circumstances. In these cases, your doctor will need to submit an application to your plan in order for you to be considered for coverage. This is called special authorization.

Understanding these terms will help you feel more confident when speaking to your drug insurance company. The manufacturers of many MS medications offer support programs that can help you better understand your insurance, apply for coverage, and communicate with your insurance company. To learn more, see "Finding the reimbursement you need."

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