How to Find the Right Plan and Save on Medication Expenses

Prescription drug costs in the United States continue to be a significant financial burden for many individuals. In 2021, Americans spent an average of $1,432 annually on prescription drugs, and in 2023, 1 in 3 adults cannot take their medications as prescribed due to high out-of-pocket costs. Several factors affect these costs, including age, insurance plan type, drug classification, and income level.

Key Factors That Impact Prescription Drug Costs:

• Age: Older individuals often face higher out-of-pocket costs for prescription drugs, as medication use tends to increase significantly with age. For instance, approximately three-quarters of people aged 50 to 64 take prescription drugs, and this number rises to 91 percent among those aged 80 and older. This increased usage, combined with age-related chronic conditions, can significantly drive-up prescription drug costs for older populations.
• Plan Type: The type of health insurance plan determines how much a patient will pay.
• Drug Type: Generic drugs typically cost less than brand-name medications.
• Income Level: Low-income individuals may qualify for assistance programs to help lower costs.

To manage prescription costs, many insurance plans use a tiered system that categorizes drugs based on their cost, effectiveness, and availability.

Types of Prescription Drug Coverage

Prescription coverage can come from private health insurance, government programs, or pharmaceutical company assistance. Understanding these options is essential for choosing the right plan.

• • • Prescription Drug Plans: Supplemental plans that help lower prescription costs in exchange for a monthly premium.
    • Formulary: A list of covered prescription drugs in a health plan.
    • Tiers: Levels of coverage based on drug type and usage.

• • • Co-Pay: The percentage of the drug cost that the patient is responsible for paying.

• • • Medicaid: A joint federal and state program that assists individuals with limited income and resources.
    • Extra Help: A Medicare program that helps qualified individuals with drug costs.
    • State Pharmaceutical Assistance Programs (SPAPs): Programs that assist with premiums and cost-sharing.

3. Pharmaceutical Assistance Programs (PAPs)

• • • Many pharmaceutical companies offer programs to help people with Medicare drug coverage afford their prescriptions.

Tips for Choosing the Right Prescription Plan

• Review the formulary for covered medications.
• Look for generic alternatives to brand-name drugs.
• Compare plans based on brand-name prescription coverage.
• Check for co-pay percentage requirements.
• Contact insurers directly for detailed coverage information.

Ways to Save on Prescription Costs

• Use prescription discount cards such as SingleCare, WellRX, or GoodRx to compare prices and access discounts.
• Ask for the generic version of prescribed medications.
• Apply for pharmaceutical or government assistance programs.

How Prescription Prices Are Set

While patients ultimately pay for prescription drugs through premiums and cost-sharing, manufacturers set drug prices. Unlike most consumer markets, patients are shielded from direct costs due to insurance coverage, allowing manufacturers to set prices at what insurers and pharmacy benefit managers (PBMs) are willing to pay. This pricing structure contributes to rising healthcare costs, as insurers pass these expenses onto consumers through higher premiums and co-pays.

How RMC Group Can Help

Ensuring your employees have the prescription coverage they need is crucial for their well-being and financial security. Navigating prescription drug coverage can be complex, but understanding the available options and cost-saving strategies can make a significant difference. By selecting the right plan and utilizing available discounts and assistance programs, individuals and businesses can ensure affordable access to essential medications.

RMC Group can help you build a comprehensive employee benefits package that includes tailored prescription coverage solutions. Our team will work with you to navigate plan options, control costs, and provide the best healthcare benefits for your workforce. Contact us today to learn more about how we can support your business and employees at 239-298-8210 or rmc@rmcgp.com.