What does a two-tiered prescription benefit plan typically involve?

A two-tiered prescription benefit plan typically involves a structure where there are different co-pay levels or financial responsibilities for members depending on the type of medication being dispensed. In this model, a higher co-pay is generally associated with brand name drugs.

The rationale behind this system is to encourage patients to utilize lower-cost generic alternatives whenever possible. By imposing higher co-pays on brand name medications, the insurance plan seeks to drive down overall healthcare costs and promote the use of more cost-effective treatments. This benefits both the insurer and the patient in the long run by reducing out-of-pocket expenses tied to more expensive brand name drugs.

In contrast, other options, such as equal co-pays for all prescriptions or lower co-pays for all drugs, do not reflect the tiered approach used to differentiate cost and encourage proper drug utilization. This is why the choice indicating a higher co-pay for brand name drugs aligns accurately with the structure and intent of a two-tiered prescription benefit plan.