Step Therapy Rules: Insurance Requirements to Try Generics First

When your doctor prescribes a medication, you expect to get it-fast. But if you’re on a health insurance plan, there’s a good chance you’ll be forced to try cheaper, generic drugs first-even if your doctor says they won’t work for you. This is called step therapy, and it’s now part of how nearly 40% of U.S. health plans handle prescription drugs. It’s not a glitch. It’s policy. And it’s changing how you get treated.

What Is Step Therapy, Really?

Step therapy, sometimes called a "fail-first" rule, means your insurer won’t pay for the medication your doctor picked unless you’ve tried and failed one or more cheaper alternatives first. These lower-cost options are almost always generics. For example, if your rheumatologist prescribes a biologic for rheumatoid arthritis, your insurance might require you to try three different NSAIDs or a generic DMARD like methotrexate before approving the expensive drug. Only after those fail-or if they cause side effects-can you move to the next step.

This isn’t about choice. It’s about cost control. Insurers use step therapy to push patients toward cheaper drugs, hoping to cut spending. According to a 2021 Congressional Budget Office analysis, step therapy can reduce pharmaceutical costs by 5% to 15% in some drug categories. But that savings doesn’t come without risk.

How It Works: The Three-Step Ladder

Most step therapy protocols follow a simple structure:

1. Step One: Start with the lowest-cost, FDA-approved generic or older brand drug. This is usually covered without restrictions.
2. Step Two: If that doesn’t work or causes side effects, move to a slightly more expensive brand-name drug or newer generic.
3. Step Three: Only after both previous steps fail do you get access to the original prescribed drug-often a specialty medication that costs hundreds or thousands per month.

For instance, Aetna’s Medicare Part B guidelines require patients with multiple sclerosis to try interferon beta-1a before approving ocrelizumab. Blue Cross Blue Shield of Michigan requires patients with depression to try at least two SSRIs before covering SNRIs like venlafaxine. The process isn’t random-it’s written into each insurer’s formulary, often with specific drug lists and required trial durations.

Why It’s Controversial

The American College of Rheumatology (ACR) calls step therapy a "dangerous practice." Why? Because waiting for a drug to fail can mean permanent damage. In a 2022 patient survey by the Arthritis Foundation, 68% of respondents said they experienced worsening symptoms during step therapy delays. One Reddit user, ChronicPainWarrior, described waiting six months to get a biologic after failing three NSAIDs. By then, joint damage had already advanced. He needed surgery.

Doctors aren’t just frustrated-they’re overwhelmed. ACR data shows physicians spend an average of 18.3 hours per week just handling step therapy appeals and prior authorizations. That’s nearly half a workday spent on paperwork instead of patients.

And it gets worse when you switch jobs or plans. If you’ve been stable on a brand-name drug for two years, then switch to a new insurer, you might have to start the whole step therapy process again-even if your body already rejected the cheaper options. Healthinsurance.org reports this happens to thousands each year, leading to dangerous treatment gaps.

When Step Therapy Actually Helps

It’s not all bad. For some people, step therapy works. A 2023 GoodRx survey found that 17% of patients ended up doing just as well-or better-on the generic drug their insurer required. One woman with mild hypertension was switched from a brand-name ACE inhibitor to lisinopril. Her blood pressure stabilized, and she saved $120 a month.

The goal of step therapy isn’t to punish patients. Insurers argue it prevents overprescribing of expensive drugs when cheaper options are equally effective. And with 90% of U.S. prescriptions filled with generics, the system does work for many.

But the problem is when the system ignores individual biology. A drug that works for one person might be useless-or dangerous-for another. Step therapy doesn’t account for that.

How to Fight Back: Step Therapy Exceptions

You don’t have to accept this. Federal and state laws give you rights. The Safe Step Act, introduced in Congress multiple times since 2017, outlines five clear situations where insurers must grant exceptions:

• You’ve already tried the required drug and it didn’t work.
• The required drug would cause severe or irreversible harm.
• The required drug is contraindicated for your condition or medical history.
• Trying the cheaper drug would prevent you from doing daily activities.
• You’re already stable on your current medication and it was previously approved.

Your doctor has to submit documentation-medical records, lab results, past treatment history-to prove one of these applies. Some insurers, like Blue Cross Blue Shield of Michigan, promise to review urgent requests within 24 hours and standard ones in 72 business hours. But in practice, many take four to eight weeks.

If your doctor refuses to fight, ask for a peer-to-peer review. That’s when your provider talks directly to the insurer’s medical director. It’s not guaranteed, but it works more often than you’d think.

State Laws Vary-Big Time

As of 2025, 29 states have passed laws forcing insurers to offer exceptions. But here’s the catch: these laws don’t apply to self-insured employer plans. And those cover 61% of Americans. That means if you get insurance through your job, your rights depend on whether your employer pays claims directly-or outsources them to a third party like UnitedHealthcare or Cigna.

States like Virginia, California, and New York have strong protections. They require insurers to respond to appeals within 72 hours and list clear exception criteria. But in states without laws, you’re at the mercy of the insurer’s internal policy.

Medicaid programs are even more unpredictable. Only a handful of states have applied step therapy rules to Medicaid through legislation. Most rely on agency guidelines, which can change without notice.

What You Can Do Right Now

If you’re facing step therapy:

1. Ask your doctor: Do they have experience filing exceptions? Can they help you document why the generic won’t work?
2. Call your insurer: Ask for their step therapy protocol for your medication. Request the written policy-it’s your right.
3. Check your state’s rules: Search "step therapy laws [your state]" to see if you have legal protections.
4. Use patient assistance programs: Many drugmakers offer co-pay cards or free trials that can bypass step therapy. Check the manufacturer’s website.
5. Appeal in writing: If denied, file a formal appeal. Keep copies of every email, form, and phone call.

The Future of Step Therapy

By 2025, analysts at Avalere Health predict step therapy will apply to 55% of specialty drug prescriptions-up from 40% today. That means more people will face delays. But pressure is growing. Patient advocacy groups are pushing for federal legislation to close the self-insured loophole. The Safe Step Act, reintroduced in 2021, could finally make step therapy rules consistent across all plans-if it passes.

Until then, you’re left navigating a system designed to save money-not to protect your health. The truth? Step therapy isn’t inherently wrong. But when it ignores your body, your doctor, and your timeline-it becomes a barrier, not a bridge.

What If You Can’t Wait?

If you’re in pain, your condition is worsening, or you’re at risk of hospitalization, don’t wait. Ask your doctor to label your request as "urgent." Some insurers will fast-track you. If they don’t, contact your state’s insurance commissioner’s office. They can intervene on your behalf.

You have rights. You just have to know how to use them.