Save Money on Healthcare: Do Your RX Homework

The news has been full of rosy reports recently telling us that healthcare spending growth is at a record low. Maybe, but that happy stat belies the fact that the actual cost of healthcare keeps going up and up. Business owners, who are struggling to contain health insurance costs while offering employees this valuable perk, are responding by asking employees to chip in a bigger percentage to pay for the benefit. If you’re on the receiving end of that decision, one of the ways you can save money is to take a close look at the drug benefits available plans offer.

According to Money.com, costlier preferred drugs are one of five factors driving up healthcare costs for consumers. They point out that while generic drug prices have remained relatively stable, preferred prescription drugs have been creeping up: “For instance, workers who opt for a brand-name drug instead of its generic alternative may have to pay an average of $53 for it, instead of $11 for the generic or $31 for a brand-name drug that doesn’t have a generic equivalent.”

Equal Benefits, Different Drugs

All ACA-qualifying health plans (QHPs) for sale in every state must offer prescription drug coverage. It is one of the 10 essential benefits mandated by the Affordable Care Act (Obamacare). But they don’t all have the same medicines. Every state sets the list of what classes of drugs must be offered — the formulary. All QHPs must submit a list of drugs they offer enrollees. They must also have procedures in place to allow an enrollee to request a clinically appropriate drug if it isn’t covered by their plan. But beyond that, a QHP is free to offer many more medicines in one category or class than another does. 

Check the Formulary Before You Buy

If you or a family member takes more than a few prescription drugs on a regular basis, it pays to check the formularies of health insurance plans your considering to make sure your medicines are included. That’s actually a fairly easy procedure. Many plans post their formularies on their websites. Or you can call their 800# and request the information. You’ll need the exact name of your prescriptions, the generic equivalent if any, the dosage you take and the number of pills your doctor prescribes.

Formularies typically list covered drugs in four tiers, ranging from the cheapest to the most expensive:

• Tier 1 – generic
• Tier 2 – preferred name-brand drugs
• Tier 3 – non-preferred name-brand drugs
• Tier 4 – specialty medicines; these can include complex drugs like those used for cancer treatment and lifestyle drugs like those used for conditions such as erectile dysfunction

Different plans have different payment structures. Some plans will charge you a coinsurance fee for your prescriptions — a set percentage of the drug’s cost. Others will charge copay — a fixed amount for each drug you buy. Either way, the actual cost will depend on the tier the prescribed drug is in. And it will not include any deductibles you have to meet. Also keep in mind that formularies can and do change as health plans look for ways to contain costs.

Shop Around

With health insurance as with most things in life, your ability and willingness to be flexible can help you save money, particularly where your prescription drugs are concerned. Opt for generic versions, take advantage of savings available by mail-ordering prescriptions and review your plan’s benefit summary so you fully understand what you’re paying for.

If you need health insurance coverage, you can shop for competitive quotes for individual or group plans here.