Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted on Help Smart Phone and MEL Magazine.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com.

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Sep 9, 2021

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The lowdown...

  • The term Rx comes from an ancient Latin word for recipe
  • Recipe meant “take”, and it grew to mean “take this”
  • Today, Rx describes medicine or pharmacy
  • Rx appears on prescriptions and other prescription drug documents

In ancient Latin, the letter R meant “recipe”. This word was a way of telling the listener to take or use something. When adding the x, Rx becomes an action verb form meaning “take this”.

The phrase grew into medical shorthand, and for centuries it has meant “take this”. In modern terms, it shortened into “prescription”. In healthcare, Rx symbolizes medicine, pharmacy, medical prescription, and prescription drug benefits.

When you see Rx listed next to a doctor name, that means they have prescribed medication for their patients. For example, if Dr Smith prescribes antibiotics, then he/she will write Rx ABX. If Dr Jones prescribes antidepressants, she might write Rx ADT.

If you need to fill out paperwork at work, check with your employer first before filling anything out. Some employers require employees to sign forms agreeing to certain conditions, such as signing up for life insurance.

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Open Enrollment Period

During open enrollment, every eligible resident has a right to buy qualified health insurance with prescription benefits on the Obamacare Marketplace. This is a simple and direct way to buy comprehensive health coverage that can also help you with prescription drug costs.

After the open enrollment period, it may be impossible to purchase a qualified health plan with the Obamacare subsidies and financial assistance to reduce costs.

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Prescriptions are an Essential Health Benefit

Obamacare classifies prescription drug insurance coverage as an essential health benefit. Qualified health plans must offer prescription benefits. Insurers set the amount, type, and price of prescription benefits. The rules require disclosure of covered drugs and the dollar amount of copays or coinsurance consumers must pay.

When selecting health insurance, prescription benefits can have a high priority for those with conditions that require medications.

Here are some other tidbits to keep in mind when researching health insurance and prescription drug coverage:

  • Prescription benefits in qualified health plans can vary widely in cost, deductibles, copays and coinsurance expenses.
  • The Affordable Care Act sets limits on the amounts that insurers can charge for deductibles.
  • Plans must provide detailed information on covered drugs and the amount consumers must pay to get benefits. Consumers can get this information in advance on the summary of benefits and plan formulary.
  • Benefits on prescription medication are valuable additions to employee protection and can reduce the risk of excessive medical expenses.

Benefits of Prescription Drug Coverage

Prescription drug plans work much in the same way as health insurance. The private insurers offer to subsidize the costs of prescription drugs in exchange for a premium. The contracts call for copays and meeting a deductible amount before benefits flow.

Prescription drugs can be expensive, and unless one uses generic medications, plans can limit the quantities and raise prices after a set point of usage. For example, you could be limited to a 30-day supply on your prescription refill when many pharmacies will offer 3-month refills (often at a small discount) to be convenient for those who take daily medications. You may find yourself making more trips to the pharmacy counter if your prescription medication plan has this sort of limitation.

Drug Tiers

Health plans list the drugs they cover in a part called the formulary. This assures subscribers that the drugs they need will be covered by insurance. The tiers divide the drugs by costs and availability. The lowest tier consists of generic drugs with low costs compared to brand name drugs and specialty drugs.

Higher tiers have higher prices, more brand names, and more costly specialty medications. The upper tiers frequently have limitations on quantity and may require pre-authorization to be covered by an insurance drug plan.

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Options for Prescription Drug Coverage

US residents have many options for prescription drug coverage. Prescription drug coverage is a good idea for everyone. The costs of medications can bring an unexpected financial burden on an individual or family unit. Even the price of regular medications can add up to a large amount without prescription drug coverage.

Those that anticipate a moderate to heavy requirement for medications are well-advised to get insurance.

Modern medicine makes extensive use of medication and outpatient treatment of diseases, illnesses, or chronic conditions. The numbered items below describe options for prescription drug coverage.

1. Private Prescription Drug Coverage

Private insurers offer prescription drug coverage. Obamacare Marketplace plans include prescription benefits, and often they are options that subscribers can elect. Prescription benefits usually have a separate deductible to trigger insurance cost sharing. Consumers must establish whether the prescription benefits are cost-effective for them.

2. Medicare Part D

This is the major prescription drug benefit for Medicare-eligible residents. They can get Medicare Part D and use it as a stand-alone prescription benefit or get similar benefits as part of a Medicare plan.

3. MA–PD

This label identifies Medicare Advantage–Prescription Drug benefit plans. This is an all-in-one approach to health insurance and prescription drug coverage for Medicare-eligible residents.

4. Medicaid provides prescription benefits in nearly every state.

Most Medicaid agencies offer prescription benefits through managed care organizations that specialize in managing this type of program. The pharmacy carve-out is a popular method among Medicare administrations.

5. Medicare Supplement

Medigap is a Medicare program serviced by private insurance providers. Medigap protects Medicare participants against excess Part B charges and provides some prescription benefits. Medigap policies sold after 2006 cannot offer prescription benefits.

Employer Health Insurance and Major Medical Plans

Many large and small group plans offer options for prescription coverage The menus may have a basic level of coverage and options for sub-group members such as those with chronic illnesses or conditions that require specialized medicines. The insurance industry refers to this process as a carve-out.

These carve-outs can save money for the group as a whole by providing higher prices and more extensive coverage to those with particular needs.

Employer-Sponsored Plans

Many employer-sponsored plans provide prescription drug coverage. Some employers and labor organizations use carve-outs to place the prescription drug coverage in the hands of specialized benefit managers.

By reducing medical costs for the average member, prescription benefits increase the net dollar value of employment and help retain skilled workers and vital staff.

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The Drug Formulary

Every prescription insurance plan must provide a list of drugs covered by the benefits. The drug list must be current, and federal rules require frequent updating. Consumers have specific rights to use the drugs they prefer while plans seek to substitute low-cost generics when possible. Plans must offer procedures for protesting denials of preferred medications.

Rx Means Prescription Drugs in Health Insurance

In health care terms, the term Rx stands for prescription drugs and medication-based treatment. This is a vital tool in the arsenal of hospital and outpatient care. Health insurance provides some prescription coverage as required by the Affordable Care Act essential health benefits.

Comparison shopping is a great way to find the best prescription benefits in Obamacare Marketplace plans, Part D Prescription Drug plans, and Medicare Advantage. Keep in mind when you are comparing plans, how often do you use medication? Daily? Only when ill? Do you want to be sure you have the coverage you want in the event that your prescription needs change?

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