If you’ve ever been told by your doctor that you need to try a cheaper drug before they can prescribe the one you really need, you’ve run into step therapy. It’s not a suggestion. It’s a rule. And it’s built into your insurance plan-whether you know it or not.
Step therapy, also called a "fail-first" policy, forces you to try one or more lower-cost medications-usually generics-before your insurer will pay for the drug your doctor originally prescribed. This isn’t about saving a few dollars on a prescription. It’s a system designed to cut overall drug spending, often at the cost of your time, comfort, and sometimes your health.
How Step Therapy Actually Works
Imagine you have rheumatoid arthritis. Your doctor recommends a biologic medication that works well for many patients. But your insurance doesn’t cover it right away. Instead, they require you to try three different generic anti-inflammatory drugs first. If those don’t work-or if they cause side effects-you can ask for an exception. But that process isn’t instant. It can take weeks.
This isn’t rare. About 40% of all prescription drug plans in the U.S. use step therapy, according to a 2021 analysis by the National Institutes of Health. Most employer-sponsored plans include it. So do many Medicare Part D and private insurance plans.
The structure is simple: Step 1 is usually a generic drug. Step 2 might be a brand-name drug that’s cheaper than the one your doctor wants. Step 3 is the drug you actually need. You have to fail at each step before moving up. And "fail" doesn’t just mean it didn’t work-it can mean you had a bad reaction, couldn’t tolerate it, or it just didn’t help enough.
Why Insurers Use Step Therapy
Drug prices in the U.S. are among the highest in the world. Insurers didn’t create these prices, but they’re the ones stuck paying them. So they use step therapy as a way to control costs.
According to a 2021 Congressional Budget Office report, step therapy can reduce pharmaceutical spending by 5% to 15% depending on the condition. For insurers, that’s a big win. For patients, it’s often a gamble.
Insurers argue they’re making sure patients get the most cost-effective treatment first. They say most people respond well to generics. And in some cases, they’re right. About 17% of patients surveyed by GoodRx in 2023 found their condition managed just fine with the required generic, avoiding the need for expensive drugs altogether.
But here’s the problem: not everyone responds the same way. For people with chronic conditions like multiple sclerosis, lupus, or severe psoriasis, waiting weeks or months to get the right drug can mean irreversible damage.
When Step Therapy Hurts More Than Helps
The American College of Rheumatology doesn’t support step therapy. Why? Because patients are getting worse while waiting.
A 2022 survey by the Arthritis Foundation found that 68% of patients experienced negative health outcomes because of step therapy. Over 40% reported disease progression during the required drug trials. One Reddit user, "ChronicPainWarrior," shared how they spent six months trying three different NSAIDs before getting approval for a biologic. By then, their joint damage had worsened significantly.
It’s not just arthritis. People with Crohn’s disease, depression, and even asthma have reported delays in treatment that led to hospitalizations, lost workdays, or permanent complications.
And it’s not just about effectiveness. Some medications can be dangerous if you’ve already tried others. For example, switching from one antidepressant to another without proper overlap can trigger severe withdrawal or worsen symptoms. But insurers don’t always account for that.
What You Can Do: Step Therapy Exceptions
You’re not stuck. Federal and state laws require insurers to allow exceptions.
Under the Safe Step Act (reintroduced in 2021), insurers must grant exceptions in five clear situations:
- You’ve already tried the required drug and it didn’t work
- The required drug would cause serious or irreversible harm
- The required drug is contraindicated with your other medications or health conditions
- Delaying treatment would prevent you from doing daily activities
- You’re already stable on the prescribed drug and have been covered for it before
But getting an exception isn’t easy. Your doctor has to submit medical records proving one of these conditions applies. That means paperwork, phone calls, and sometimes multiple appeals.
Blue Cross Blue Shield of Michigan says they review standard exceptions in 72 business hours. Urgent cases get a 24-hour turnaround. But that’s not universal. Some insurers take four to eight weeks. And if your doctor’s office is understaffed, they might not even start the process right away.
Doctors are drowning in paperwork. The American College of Rheumatology found that physicians spend an average of 18.3 hours per week just handling prior authorizations and step therapy requests. That’s nearly half a workday. Many don’t have the time or resources to push back.
State Laws vs. Self-Insured Plans
Here’s where it gets messy. Twenty-nine states have passed laws to protect patients from abusive step therapy rules. These laws require faster reviews, clearer exception criteria, and limits on how many steps you must go through.
But here’s the catch: those laws don’t apply to everyone. About 61% of Americans get their insurance through self-insured employer plans. These are run by large companies (like Walmart, Apple, or Google) that pay for their employees’ healthcare directly instead of buying insurance from a company like UnitedHealth or Aetna.
Self-insured plans are regulated by the federal government under ERISA, not state laws. So even if your state has strong protections, your employer’s plan can still force you through a five-step process with no time limits.
That’s why the Safe Step Act matters. It would require all self-insured plans to follow the same exception rules as fully-insured plans. But as of 2025, it hasn’t passed.
What You Should Do Right Now
If you’re on a medication that’s being blocked by step therapy:
- Ask your doctor if they’ve submitted an exception request. Many don’t do it automatically.
- Get a copy of your insurance plan’s step therapy policy. It’s usually on their website under "Drug Coverage" or "Prior Authorization Requirements."
- Check if your condition qualifies for an exception under the five federal criteria.
- If your doctor says no, ask them to document why the required drugs won’t work for you. Use specific terms: "contraindicated," "risk of irreversible damage," "previous failure."
- Call your insurer directly. Ask for the name of the person handling your case and follow up in writing.
Some patients have had success by contacting their employer’s HR department. If enough employees complain, companies can pressure their insurer to change the policy.
Alternatives to Step Therapy
If your insurer won’t budge, here are two real-world options:
- Pharmaceutical assistance programs: Nearly 80% of major drug makers offer co-pay cards or free medication programs for eligible patients. These can bypass step therapy entirely because the drug is being paid for by the manufacturer, not your insurer.
- Switch plans during open enrollment: If you’re choosing insurance next year, look at formularies. Some plans have fewer step therapy requirements. Use tools like Medicare’s Plan Finder or private comparison sites to see which plans cover your medication without forcing you to fail first.
And if you’re on a generic drug that works? Great. Step therapy did its job. But if you’re stuck on something that’s not working, you’re not being difficult. You’re being smart.
The Future of Step Therapy
Step therapy isn’t going away. Drug prices are still rising. Insurers need tools to manage costs. But the system is broken when it delays care for people with life-altering conditions.
Industry analysts at Avalere Health predict that by 2025, step therapy will apply to 55% of specialty drug prescriptions-up from 40% today. That means more people will face this hurdle.
The push now is for faster decisions, clearer rules, and better protections for vulnerable patients. Until then, you need to know your rights-and how to fight for them.
Step therapy isn’t about saving money. It’s about who pays the price.
What is step therapy in health insurance?
Step therapy is a rule used by health insurers that requires patients to try one or more lower-cost, usually generic, medications before the insurer will pay for a more expensive drug prescribed by their doctor. It’s also called a "fail-first" policy because you must prove the cheaper options didn’t work before moving up.
Why do insurers make me try generics first?
Insurers use step therapy to control rising drug costs. Generic drugs cost a fraction of brand-name drugs, so requiring them first reduces overall spending. While this saves money for the plan, it can delay effective treatment for patients who need a specific medication.
Can I skip step therapy if my doctor says I need a specific drug?
Yes, but you have to request an exception. Federal rules require insurers to grant exceptions if the required drug won’t work for you, could cause harm, or if you’re already stable on your current medication. Your doctor must submit medical records supporting your case.
How long does a step therapy exception take to get approved?
Standard requests usually take 72 business hours, but many insurers take four to eight weeks. Urgent cases-like those where delay could cause serious harm-should be reviewed in 24 hours. But in practice, delays are common, and many patients give up before getting a decision.
Are step therapy rules the same in every state?
No. Twenty-nine states have laws that protect patients by requiring faster reviews and clearer exception rules. But these laws don’t apply to self-insured employer plans, which cover about 61% of Americans. Those are regulated by federal law, and protections there are weaker.
What if I switch jobs and my new insurance requires me to start step therapy again?
That’s a common and dangerous problem. Even if you’ve been on the same medication for years, your new insurer can force you to restart the step therapy process. This can lead to treatment interruptions and worsening health. You should immediately request an exception based on prior stable use and provide documentation from your previous plan.
Can pharmaceutical companies help me bypass step therapy?
Yes. About 78% of major drug makers offer patient assistance programs, including co-pay cards or free medication for eligible patients. These programs pay for the drug directly, so your insurance doesn’t get involved. Ask your doctor or pharmacist if your medication has one.
