With the introduction of the Affordable Care Act (ObamaCare), it seems that prescription prices have gone up. How is the average person supposed to keep prescription costs down? Here are some ways to keep prescription costs down:
- Check the Tier: Health insurance plans have what is called the formulary for their approved drugs. They shuffle the drugs into three or more tiers. Tier 1 drugs are the least expensive. If your out-of-pocket cost or co-pay has gone up this year, it could be because your drug was shifted from a Tier 1 to a Tier 2 or higher. Check with your insurance plan to see if this was the reason. If so, ask your doctor to switch you to a compatible substitute, especially a generic brand, as they are less expensive.
- Ensure that the pharmacy you are using, even if it’s one you’ve been using for a long time, is still considered to be “in-network” by your insurance plan. Insurers often switch in-network pharmacies, so keep track of it. You might also be able to save some money by switching to the mail-order prescription service offered through your insurer. You might see a savings of up to 20% or more than the cost through a retail pharmacy. You can also download the OneRx app (available for iOS and Android). The app does the searching for you by shopping around locally for the best deals. It will also scour online for any available coupons that can reduce your out-of-pocket costs.
- Consider a Flexible Savings Account (FSA) or a Health Savings Account (HSA). Your employer must offer an FSA or a High Deductible Health Care Plan for you to qualify to open an HSA. With an FSA you contribute pre-tax money through a payroll deduction (maximum for 2016 is $2,550). You can use the money you put in to pay for your prescription costs. To open an HSA , you must:
- be covered by a high deductible health plan;
- not covered by another health plan;
- not eligible to be claimed as a dependent on another person’s tax return;
- not entitled to Medicare benefits.
An HSA has no income limits and it does not have a maximum contribution limit, as the FSA. To qualify as a high deductible heath plan (HDHP) the plan must have:
- an annual deductible of at least $1,300 and;
- require that annual out-of-pocket expenses (including co-payments and deductibles but not insurance premiums) paid do not exceed $6,550. Family coverage limits are an annual deductible of not less than $2,600 and require that out-of-pocket expenses not exceed $13,100. These are 2016 limits.
You can use the HSA to pay for medical expenses, including:
- Long-term care insurance. (subject to IRS mandated limits based on age and adjusted annually, see IRS Publication 502: Long-Term Care).
- Health care continuation coverage (such as coverage under COBRA – see IRS Publication 502: COBRA Premium Assistance).
- Health care coverage while receiving unemployment compensation under federal or state law.
- Medicare and other health care coverage if you were 65 or older (other than premiums for