Recently, my spouse went to the pharmacy to fill a prescription and ended up paying cash because she did not have her insurance card. A few days later, I went back with the card to have the claim re-processed using our insurance. When I handed the pharmacist my card he promptly said, “You should reconsider doing this.” “Why,?” I asked.” “Because it will cost you more with your insurance,” was his response. I was surprised to learn that instead of the $85 my spouse had paid in cash, I would have to pay $125 with my insurance to meet my deductible. I quickly retracted my insurance card and left wondering why I didn’t have a better deal through my insurance company.
This was an eye-opening experience and counterintuitive to what I expected. I have a good insurance plan, then why would paying cash be a better way to go?
It turns out that my scenario is fairly common and pharmacists have known about this for a long time. According to an article by the NY Times, this scenario happens about 10% of the time. Some pharmacies even have gag clauses in their contracts that prevent the dispensing pharmacist from sharing this information.
What is the best option for the consumer?
The answer to this question may depend on what type of plan you have - a traditional copay plan or a qualified high deductible plan with a Health Savings Account (HSA).
Some plans that have copays are designed to charge you the copay or the actual cost of the drug - whichever is less. For example, if you have a $10 copay but the generic is $4, you might only be paying pay $4. However, other copay plans will charge you the copay even if the cost price of the drug is less (i.e. $10). Therefore, knowing which type of copay plan you have is crucial to knowing if you should use your insurance or not.
Health Savings Account (HSA)
For those on HSA plans, drug costs are already illuminated since the full deductible must be met prior to the plan paying any of the prescription costs.
How to find the cheapest prices?
It is important for the consumer to look at multiple data points to make the best decision. Try to find what the cash cost of a drug is versus how much you would pay on your insurance plan. Finding the cost from your insurance plan is easy. Most of the major insurers have tools on their websites where you can look up a medication and compare the prices at the major chains for the same drug. Next, call around and ask what the price for a medication is without insurance. Then look at consumer friendly websites like Good Rx or FamilyWize to give you a good sense of low price opportunities. Don’t forget about the retailers like Costco, Walmart, and Target who have $4 generic lists that you can take advantage of.
It’s important to remember that if you use a coupon or a discount program, you are not utilizing your insurance plan and therefore, your charges will not go towards your deductible and out of pocket maximum.
If you want to learn more about what drives pharmacy costs, register for our free webinar on March 6 with Dr. Love.