Drug Benefit Exclusions

All health insurance plan have a drug formulary, or list of covered medications. Obviously, drugs not on that list are excluded, but the exclusions may include services and miscellaneous fees related to drug benefits.

pregnant woman
© Photographer: Drbouz | Agency: Dreamstime
Some plans exclude preventative care, like "well baby" checkups.

Many excluded drug benefits are in the cosmetic or nontraditional category. Drugs used for purely cosmetic purposes (like hair-growth stimulants and supplements for clear skin or strong nails) are usually not covered. Ditto for nontraditional drugs, like food supplements and experimental medications, and drugs that are used to abort a pregnancy.

There are also some nonmedication exclusions in this category. For example, many workers stand in one position for hours, which can cause damage to the back and legs and result in more serious complications like deep-vein thrombosis. But insurance usually doesn't cover supportive garments and back braces.

Most of these exclusions happen in both fee-for-service and managed-care plans, but there are differences.

Exclusions by Plan
Fee-for-service plans, or indemnity insurance, reimburse a set percentage of your health expenses and give you the freedom to select providers and hospitals. With this freedom often comes a higher monthly premium. Also, this type of insurance focuses more on the sick patient than on preventative care. Because of this, preventative care, such as annual physicals and "well" baby checkups, is often excluded.

Don't be Surprised!
  1. Get an itemized hospital bill. To avoid extra hospital charges, get an itemized hospital bill and compare it carefully with your insurance plan’s exclusion list.
  2. Check with your state. Some states have rules about the services that can be excluded from an insurance plan. Click here to check if your insurance plan is abiding by your state's rules.
  3. Don't be fooled by a short list. You might feel lucky if you see a short list of exclusions in your insurance handbook, but be careful. A short list could include only the most common exclusions, and more exclusions could be listed under specific categories. Private nursing care may not be on the official exclusion list, but it might be mentioned in the home care section.
  4. Be nosy. If you aren’t sure, call before a procedure or new treatment.
  5. Make sure it's up-to-date. An exclusion list can change on a weekly basis. So check the list every time you consider a change in health care.

HMOs and PPOs are the most popular types of managed-care plans. These plans are restrictive in terms of freedom of choice, but they're also usually much cheaper than other insurance plans.

Managed-care plans have more of a focus on preventative care, so physicals and the like are not excluded. Cosmetic surgery, experimental drugs and alternative medicine, however, are usually excluded.

Check out the links on the next page to learn more about health insurance exclusions.