Smart Benefits: 5 Ways to Save Money on Prescriptions
Monday, August 06, 2012
Last Thursday, the Generic Pharmaceutical Association released its annual report with big news: generic medications in the United States saved consumers about $193 billion last year alone, up 22% from money spent in 2010, and three times the savings in 2002. Why the surge? Many popular brand names drugs have lost their patent. Once multiple versions of a brand-name drug become available, the prices for generics can be 80-90% less than the brand equivalent. And since consumers are looking to save on healthcare costs, the time is ripe for them to give generics a chance. However, since some carriers include coverage for certain brand medications at the same copays as generics if they can negotiate stronger deals, consumers should always check their insurer’s drug lists for specific coverage levels.
Most health insurance carriers offer consumers the choice of purchasing maintenance prescriptions at a retail pharmacy or through mail order. And, often, employees pay a reduced copay while receiving a few months’ worth of medication through mail order purchasing. For example, if the benefit coverage requires a two-month copay for a three-month supply, at the end of the year, the consumer pays only nine months’ worth of copay for a year’s supply. For someone with several prescriptions, the savings can add up to hundreds per year.
Big discount chains negotiate huge savings on certain categories of popular prescriptions and make the drugs available at a flat copay, often as low as $4 or $7. That’s because the retail giants use the low copays as loss leaders, knowing that consumers will find other items to spend money on while shopping. So with prescriptions, it pays to comparison shop.
Many popular medications are no longer available with a prescription and instead can be purchased over-the counter. Since certain medications, like those used to treat allergies and acid-reflux, can be costly, particulary if the health insurance plan requires a high deductible coverage kicks in, check with your doctor to see if lower cost equivalents are available over-the-counter.
FSAs and HSAs
Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs) allow consumers to pay for qualified medical expenses pre-tax, saving the average person 30% annually on out-of-pocket costs. Since prescriptions count as qualified medical expenses, when budgeting how much to set aside in a FSA or HSA, consider the annual cost of prescription copays for any family members. Just be careful: with FSAs since you lose what you don’t spend. With a HSA, however, you can always save unspent money for future use.
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