Saving on Prescription Drug Costs

Saving on Prescription Drug Costs

Follow these tips to help you better plan for your costs and save money.

It’s no secret that prescription drugs can be very expensive, and costs continue to rise. Since these expenses can be tough on your wallet, we have some tips to help you better plan for your costs and save money.

Understand your plan’s formulary and tier levels.

Do you know if your plan’s formulary covers your current medications? A formulary is your insurance plan’s list of covered prescription drugs. Changes may be made to the formulary periodically, so it’s good to ensure you have the most updated formulary list for your plan.

It’s also important to know which tier level your prescriptions are in. A medication’s tier level is its price category within the formulary. As a medication increases in tier level, it generally costs more. Similarly, the lower the medication’s tier level, the less you will pay when you have it filled.

Make sure your medications are on your plan’s formulary and know which tier they are in. We often hear from clients who are caught off guard by the cost of their prescriptions because they didn’t understand how their formulary coverage and tier levels could impact their prescription costs. Understanding your coverage can help save you money each year. Our team of advisors is a good resource and we can review a plan’s formulary and tier level details with you.

Use your plan’s preferred pharmacies.

Increasingly, prescription drug plans are featuring “preferred pharmacies” as a way to lower copay amounts. If your plan provides a list of preferred pharmacies, you can choose to have your prescriptions filled at any of those locations and potentially save money by doing so.

On your Medicare Advantage or Part D Prescription Drug plan, certain pharmacies have a contracted relationship with your insurance company. These pharmacies are considered “preferred” by the insurance company. This means that you may pay less if you use these in-network preferred pharmacies to fill your medications. This applies to both local retail pharmacies and mail order pharmacies.

Many insurance companies categorize network pharmacies as “standard” or “preferred.” If this is the case on your plan, you will find that preferred pharmacies will give you the lowest copays on your medications. Standard pharmacies are in-network, but you will usually pay more money to fill your medications there.

To find out which pharmacies are preferred on your specific Medicare plan, you can reach out to your insurance company. RetireMed clients can reach out to our Client Advisor Team.

Consider using a mail order pharmacy.

A mail order pharmacy is a convenient and often more cost-effective option for filling your prescriptions. It’s common for mail order pharmacies to charge lower copays for maintenance medications, which are typically tier 1 and tier 2 medications on your plan’s formulary. Note that not all plans offer lower copays if you purchase them through a mail order pharmacy and most Medicare plans have one preferred mail order pharmacy.

While Medicare Part D plans allow you to use retail pharmacies, many people enjoy having their prescriptions delivered to their door. When using mail order pharmacies, you have to deal with processing and shipping time. If you take a prescription that you need right away, it would make more sense to go to a local pharmacy.

Mail order pharmacies will usually only dispense 90-day supplies of medications. If you need a shorter supply such as 30 or 60 days, you may want to fill at a local pharmacy. An example of this might be if your doctor is having you try out a new medication or you were prescribed an antibiotic that you will only need to refill one time.

Our client advisor team can help our clients set up their mail order account.

Ask about paying cash and using coupons.

Ask your pharmacist if the cost of your prescription drug is lower when paying with cash as opposed to using insurance. In some cases, it is more cost-effective to pay cash. When you use cash to pay for your prescriptions, you can occasionally apply coupons, which may save you more than if you used your plan. GoodRx and SingleCare are great resources we recommend to clients because they have many coupons for most reputable pharmacies. Keep in mind though, that if you don’t use your insurance to pay for your medications, the cost will not count toward your prescription out-of-pocket maximum or deductible.

You may qualify for “Extra Help.”

Extra Help is a government program designed to help individuals—specifically those with low income or limited resources—pay for Medicare Part D. Medicare Part D covers prescription drugs. The Extra Help program can help with the cost of premiums, deductibles, and coinsurance for a Medicare prescription drug plan. Seventy percent of people who qualify for Extra Help don’t even realize that they are eligible.

State governments distribute Extra Help coverage. However, individuals must meet the federal government’s financial criteria to qualify. Limits on annual income and available resources determine if someone is eligible. Read more about the Extra Help program here.