Imagine this. You’re sick. You go to the doctor, and the doctor prescribes you medication to help combat your illness. Great! Next step…pharmacy. Simple, right? Nothing to worry about, as you have insurance. You pay your $20 copay, get your medication, and you’re on your way. All is well with the world. But wait! After doing a little research later, you realize that prescription you paid $20 for was actually only $4. You become sick again. But this time, you’re simply sick to your stomach after finding out how much you could’ve saved by simply forgoing the insurance card and paying with cash.
That’s not a real-life scenario, right? Wrong! During open enrollment meetings recently with one of my clients, an employee was complaining about the cost of her medications going up. She was paying $60 a month for three prescriptions ($20 copay for each), which were all generic drugs. She didn’t realize that if she would’ve simply paid with cash, she would’ve only had to pay $12 for her three generic prescriptions instead of $60. After realizing this, she was able to save $48 a month by paying cash. Think about it…that’s $576 a year!
I get it. Most people are used to simply giving their insurance card to the pharmacy and paying their copays. I’ve been guilty of this in the past myself. But, what we’ve been encouraging employees to do in open enrollment meetings is to use services like Compass or OneRx. These sites help people be better consumers and understand the price differential for the same drug.
And there’s definitely a price differential between generic and brand-name drugs. In 2008, the average price of a brand-name drug was $137.90, while the average generic prescription cost was $35.22, according to the National Association of Chain Drug Stores. Why? Well, according to the Federal Drug Administration, generic medicines don’t have to repeat animal and clinical (human) studies that are required of the brand-name medicines to demonstrate safety and effectiveness. The reduction in upfront research costs means that, although generic medicines have the same therapeutic effect as their branded counterparts, they’re typically sold at substantially lower costs.
The main advice we tell clients about this is, “Do your research.” I would suggest doing an annual prescription review to see what prescriptions could have a generic equivalent available. In addition, evaluate which cases it makes sense to pay cash instead of using the insurance card. If you’re getting a generic prescription, you may just be better off paying with cash.
What are your thoughts on this? Have you had employees deal with this or have you dealt with this personally? I’d be curious to hear from you. Also, don’t hesitate to reach out to me with questions. As I said, we’ve been discussing this particular topic at great length recently, and I’d be happy to share any more tips and suggestions I have with you.
