How Do Prescription (RX) Discount Cards Work?
By Jessica PollackI'm sure you've seen a Prescription Drug (RX) Discount Card before. Some of you may have actually used it once or twice. But most of you, if you have seen them, then dismissed it - for whatever reason - I already have prescription coverage in my health plan, I can afford to pay cash for my prescriptions, I don't use coupons or gimmicks, just sell me my stuff and let me go on my way - whatever.
First, let me tell you a little bit about these cards. Charity Organizations and Workers Associations are already distributing these cards to their charity recipients. People are saving enough money on medications to be able to afford other essentials like gas, electric and food as well as their prescriptions. Great right? But what about the non-charity recipients? We don't need these cards... or maybe we do and didn't know it.
Take a 30 year old male, in good health except for asthma which is under control with daily medication - no troubling incidents or Emergency Room visits for years. You'd never know he's got any medical issues. Our man is working a good job with good benefits. He has the top-of-the-line health plan at his work and contributes $100 a month for that privilege. With this plan, his 3 daily medications cost $24, $28 and one over the counter drug is $64. That's $116 a month. With his insurance premium copay he's at $216 a month.
Through a cost shift measure, his job gets eliminated. He is laid off. No problem, he's young, intelligent, he'll get a new job quickly. In the meantime, he still has to take his 3 medications daily. No one wants someone with drippy red eyes, wheezing across the desk at them in a job interview. No problem, he'll get COBRA. That's when he finds out that his $100 a month health insurance policy actually costs his company $810 a month. With COBRA - he's up to $926 a month in premiums and medications.
Being a smart consumer, he figures he can get individual care cheaper through health care reform. He now discovers that health care reform says he can't be denied coverage because of his existing condition, but it doesn't make it any cheaper. That $810 per month his company is shifting to him through COBRA now gets what is called a "rate-up" in the individual health care market. For controlled asthma, different carriers "rate-up" a minimum of 10% up to 70% more than the same policy for the same coverage if he didn't have the condition. This one is a 30% rate-up. He's now at $1,053 per month for health care premiums to keep the same plan he had at his job.
Again, he realizes that other than the prescriptions, he doesn't need over $1,000 worth of medical care a month and looks at lower priced policies. The first thing these lower premium policies do, is increase the deductible. He rarely sees the doctor except to renew his prescriptions annually and that check-up is now covered with no co-pay by any policy. So he opts for the lowest monthly premium. The second thing insurers do, is restrict prescription drug purchases to keep the monthly premium down.
Right now, the lowest priced option for a healthy 30 year old man is $74 per month ($96 with the 30% rate-up), but it doesn't cover his two brand name drugs until he's spent $2500. His two prescription drugs under his current plan cost him $52 a month, $624 a year, nowhere near the $2500 prescription deductible. Still WAY better than the premium health plan or COBRA.
But wait, now that he is paying cash for his prescriptions, they go up to full price. The $24/mo prescription is $141 retail and the $28/mo prescription is $159 retail. He is now up to $364 a month for his medications. Still cheaper.
Then you introduce him to the RX card. His $141/mo retail cost goes to $70 and his $159 is reduced to $82 (no change to the over the counter med) $216 total vs. $364. You are his new best friend.
Plan | Premium | RX 1 | RX 2 | OTC | Monthly Total
COBRA | $ 810 | $ 24 | $ 28 | $64 | $ 926
Indiv Plan | $1,053 | $ 24 | $ 28 | $64 | $1,169
Base Plan | $ 96 | $141 | $159 | $64 | $ 460
Base w RX card | $ 96 | $ 70 | $ 82 | $64 | $ 312
These numbers based on quotes from carriers and local pharmacists for this specific case August 2012.
So, the next RX Card you come across, hold onto it. You just never know.
You can download a card and use it immediately by filling out the form here https://fivestarfsa.com/Discount_Rx_Card.html. If you are part of an Organization that would like to learn how to use the card to raise funds while helping your membership and clients, contact Five Star. https://fivestarfsa.com/Contact_Us.html. Tell them you saw this article and want to know more.
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