Definition: What is PPO (Pharmaceutical Insurance)? A Pharmaceutical Insurance, also known as Pharmacotherapy Insurance or Pharmaceutical Reimbursement Insurance, refers to coverage provided by health insurers that covers medical expenses for pharmaceuticals rather than drugs themselves. The concept of a pharma insurance follows the same basic formula as regular health insurance: you pay an annual premium (also called deductable) and then you're out of pocket if your doctor prescribes a drug. The reimbursement is based on the amount of actual costs incurred during that period, usually based on what you are allowed under your specific plan. Pharma Insurance typically covers drugs for which there are no known alternative treatments. Examples include insulin, blood pressure medication, and anti-infectives. You're not required to take the drug, but if you do, a percentage of the cost will be paid by your insurance coverage. This means that when your doctor prescribes a new medication, the pharmacy only pays for the part that's covered under your insurance policy. Pharma Insurance is generally considered more affordable than traditional health insurance because it offers lower rates on drugs and has fewer limitations on coverage. However, there are some costs associated with purchasing and using this type of insurance, such as deductibles or coinsurance amounts.
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