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Medication or Prescription Copays: How You Can Save Some Money!

Updated on April 7, 2011

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Prescription coverage almost always comes with individual medical insurance policies. Medication copays and the insurance company formulary will determine how much you are going to pay for drugs. A formulary is simply a list of what medications are covered by your medical insurance policy and what tier that medication falls within. In most instances, your medications will be listed in the tier one copay or the tier two copay category. Sometimes your doctor will want you to take a medication that is not listed in your insurance company formulary, but handling that will be covered in another article.

The most common tier breakdown is a three tier program. Generic drugs or the cheapest drug choice will be covered under the first tier. Depending on your specific medical insurance policy and benefits, the tier one copay will be anywhere from $5.00 to $20.00. Most policies offer a standard $10.00 tier one copay. Brand name drugs or those drugs for which there is no generic alternative usually make up the second tier with a standard $20.00 copay and non-formulary drugs, drugs that require pre-authorization or drugs the insurance company doesn't like to pay for, make up the third group, usually $40.00 or more.

Many pharmacies, including the most popular and largest that you will find are the chain stores. In my experience, they are often the least helpful and most rigid in terms of making no attempt to save you even a little bit of money. To illustrate, you walk in with a prescription for a generic drug. The pharmacy will go online to bill your insurance company, they will fill your prescription and charge you the standard $10.00 copay. Before they bill your insurance company, they will know how much the prescription costs without insurance. Many times, that generic drug costs less than your $10.00 copay. So, for the same prescription, they will charge their cash paying customers $7.00 for the same medication. They are not required to tell you that if you simply pay cash instead of going through the insurance company, that you will save $3.00. In addition to offering you information on the cheapest way to fill the prescription, the pharmacy has another option. The pharmacy can bill the insurance company and only bill you (as your copay) for the cost of your medication. They are not, obliged by law, to charge the full copay. They are allowed to charge the copay, up to the actual cost of the medication. The example I have given above has actually happened to me on numerous occasions and I am a heath insurance professional, so I should know better. I was simply too lazy to do my homework and then argue with the pharmacy or its staff.

Well, times have changed, as they say. Even a three or four dollar savings has become significant in this economy. Money is not flowing as freely as it once did.

The Simple Question Designed to Keep Money in Your Wallet

Whenever you go to the pharmacy to have a prescription filled, show the clerk the prescription and ask the question, "How much is this without insurance?" The answer to that question will determine whether or not you should use your insurance for the medication. Many antibiotics cost less for a 10 day course of treatment than your copay. Many blood pressure and diabetes drugs are less than $10.00 for a 30 day supply. There is absolutely no legitimate reason to pay more than the cost of medication in the form of a copay than the medication costs the cash paying patient.

Some pharmacies, when pressured, will give in and charge a copay based on the cost of the medication, but they will most likely tell you that the law states that they have no choice,they have to charge you a copay. True, when billing your insurance company, they are not allowed to waive the copay, but there is NO law that states they must charge the full copay if the cost of the medication is less.

If you take the same drugs on a month to month basis, the yearly savings can become significant. I take four medications every day that cost $7.00 for a one month supply. Because I only pay $7.00 instead of my $10.00 copay, over the cost of a year I have saved $144.00. That is a significant savings, in my opinion.

When Your Pharmacy Won't Cooperate

If your pharmacy refuses for some reason, to provide you with the prescription savings that are outlined here, maybe it is time to change pharmacies. Many of the smaller pharmacies are more than willing to accomodate you and your needs as a consumer. They usually contract with all of the insurance companies and they even learn your name after a few visits. They may not be open 24 hours a day, but you don't need them to be. With a little forethought, you shouldn't have to pick up your maintenance medications on a Saturday night at midnite.

Save Even More Money!

Last month, I had a prescription for a generic antibiotic for which I knew I would not require refills. In the Sunday newspaper, there was a coupon for a $25.00 gift card from CVS, a major chain store. If I had a new prescription filled there, the gift card was mine. Target has similar coupons. I cut out the coupon and even though I do not use CVS for my prescriptions, it was well worth it. I spent $10.00 for my copay and received the $25.00 gift card. The next week I went to CVS and bought paper towels, toilet paper, some mascara and stamps. They were all free because I was able to use the gift card! Try it! It was a good feeling to know that I saved alot of money for simply cutting a coupon.

As a side note: I have written many articles on health insurance and have recently noticed that some of those articles have been reprinted, without permission, without being attributed to me. One of the sites that is guilty of this is a foreign company currently being investigated by their own country for fraud. They are using one of my articles, with my name removed, to entice people to sign up for their services. Please be cautious when seeking assistance with your health insurance problems. Not all companies are above board. If they steal writing, imagine what they will do with your money!


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    Maryland Lady 5 years ago

    I came across something that doesn't seem right to me. A generic form of a prescription I take has just come out. Of course I was happy, because I assumed my copay would drop significantly. Lo and behold, my insurance company is charging the same copay of $100 for 90 days of GENERIC pills as they are for the BRAND version. In other words, THEY are paying less, but I am paying the same -- they are not passing on the savings. This seems almost fraudulent to me. Has anyone else encountered this? It seems shady. I'm paying $645 for COBRA and, well, this just makes me mad. If you have any info on this, please contact me at Thanks!