5 Questions to Ask About Your Prescription Drug Coverage
It’s becoming an increasingly common experience for someone with a medical need to leave the pharmacy empty handed. Drugstore sticker shock has many contributing factors—many of them outside any individual’s control—but it’s possible for you to save money on the prescriptions you need by choosing the right health plan.
How? Here are five questions to consider when choosing a health plan to reduce your prescription costs.
1. Can I Get the Medication I Need for Little to No Cost?
Believe it or not, many people overpay for prescription drugs simply because they’re going to the wrong pharmacy—that is, the wrong pharmacy for their current plan and particular prescription.
Depending on how and with whom your plan’s pharmacy benefit manager (PBM) has negotiated prices for your prescription drug plan (PDP), certain drugs might be $200 at one pharmacy and $20 at another. Be sure you price shop your prescription drugs to see if you can get them somewhere else for little to no cost.
You might also consider prescription discount cards like GoodRx to help save money, but you should keep in mind that—while anyone can use GoodRx without membership or registration—GoodRx discounts cannot be combined with negotiated drug prices from a health insurer.
2. How Many Prescriptions Do I Need?
How you answer this question will help you determine if you'd be better off with a more traditional plan—such as a preferred provider organization (PPO)—or a high deductible health plan (HDHP) that includes a health savings account (HSA).
Traditional plans include set amounts for prescriptions called copays that usually don't count towards your deductible. Copay amounts are typically in tiers according to cost—usually anywhere from $10 to $70.
For example, if you take 4 prescription drugs and the monthly cost for each is $60, you'd be spending $2880 per year on your prescriptions (4 drugs x $60 each x 12 months = $2880). With a traditional plan, this $2880 wouldn’t count towards your deductible. So, your actual healthcare expenses would be your monthly premiums plus your deductible plus the $2,880 for prescriptions.
HSA plans, however, don't have copays. While the cost upfront is more, all prescription expenses count towards your deductible.
If you take one expensive prescription drug and have little to no healthcare expenses outside of this drug, it might make sense to select a more traditional health plan—like a PPO—to keep your monthly costs low. When you select an HSA plan, you have more control over your healthcare expenses, but often have to spend more upfront to meet the deductible.
3. Are Any of the Prescriptions I Need Considered “Specialty Drugs”?
Find out how much the drugs you need cost without insurance and which tier the drugs would fall under on a traditional plan. “Specialty drugs” refer to any medications requiring skilled handling, administration, and/or oversight that are prescribed to treat complex or chronic conditions.
All of this means specialty drugs are often expensive. If you take several specialty drugs, it might make more sense to go with an HSA-based plan as long as you are prepared to pay more upfront.
Of course, since HSAs are features of HDHPs, the better decision could still depend on how high the deductible is in a particular plan. According to HealthCare.gov, to qualify as an HDHP, the annual deductible could be anywhere from $1,400 to $7,050 per individual or $2800 to $14,100 per family.
4. What Other Healthcare Needs Do I Have?
Prescription drug costs aren't the only factor to consider in selecting a health plan. For example, doctors’ visits and physical therapy—like prescription drugs—have copays on traditional plans but do not have copays on HSA-based plans.
Again, you'll want to take into account the fact that copays do not count towards your deductible in a traditional plan, while all expenses on an HSA-based plan do count towards meeting your yearly deductible.
5. Are My Overall Estimated Healthcare Costs High or Low?
Reviewing all your healthcare costs for the last couple years will help you predict what your future costs may look like.
The more accurate your accounting and forecasting, the better you’ll be able to make the best decision for you and your family’s health coverage.
You can stay informed, educated, and up-to-date with prescription drug benefits, healthcare, and other important topics using BerniePortal’s comprehensive resources:
- BerniePortal Blog—a one-stop-shop for HR industry news
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- HR Guides—essential pillars, covering an extensive list of comprehensive HR topics
- BernieU—free online HR courses, approved for SHRM and HRCI recertification credit
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