What Is Prior Authorization?

How it affects what you pay

If your prescription requires prior authorization and it hasn't been approved yet, you may be responsible for the full cash price if you fill it before approval is granted. HealthCare.gov's glossary is explicit that preauthorization isn't a promise your insurance will cover the cost, only a determination of medical necessity based on the plan's criteria (HealthCare.gov Glossary, preauthorization). This means even an approved prior authorization doesn't eliminate your copay or coinsurance; it simply allows the claim to be processed under your plan's normal cost-sharing rules. Delays in the prior authorization process can also delay when you're able to start a medication, which is a separate concern from cost.

Example

Consider a hypothetical: a doctor prescribes a newer brand-name medication that the insurance plan requires be reviewed before coverage applies. The prescriber's office submits clinical documentation, and the plan reviews it before deciding whether to approve coverage. If approved, the patient's normal copay or coinsurance then applies; if denied, the patient may need to appeal or consider an alternative drug. This is a general illustration, not a real approval outcome.

Why insurers require prior authorization

Plans use prior authorization to confirm that a prescribed drug meets specific clinical criteria and is an appropriate use of plan resources before paying for it, particularly for newer, higher-cost, or specialty medications. CMS has acknowledged both the administrative burden this creates and ongoing federal efforts to streamline and speed up the process across Medicare and Medicare Advantage plans (CMS, Moving Prior Authorization into the 21st Century). Prior authorization requirements are typically noted directly on your plan's formulary, alongside other utilization tools like step therapy.

What to do while waiting

Ask your prescriber's office to confirm the request has been submitted with complete documentation, since incomplete submissions are a common cause of delay. While you wait, compare prescription prices on BetterBuyRx to see what the cash price would be if you needed to fill the prescription before approval comes through. Our guide on prior authorization: why it delays prescriptions and what to do covers the appeals process and typical timelines in more depth.

If prior authorization is denied

You generally have the right to appeal a prior authorization denial through your insurer's formal appeals process, and your doctor's office can often assist with that request. In the meantime, search your medication on BetterBuyRx to check whether a lower-cost alternative or the cash price might be a workable short-term option while the appeal is resolved.