Safe Saving Tip: Not Using Your Insurance To Save On Prescription Drugs

PSM has multiple suggestions for quick and safe ways to lower your prescription costs and one way we suggest is that people always ask what the cash price for the medication would be. This does not mean paying in physical cash. It means if your pharmacist fills the prescription without running it through your insurance at all, how much would it cost you? It may seem counterintuitive, but depending on what your co-payment is, not using your insurance might save you some money.

As reported by Bloomberg BNA, the practice of letting customers pay more than the cost of the drug by having them pay the full co-payment amount instead of the less expensive cash price is called prescription drug “clawback.” A clawback works like this: let’s say your doctor writes you a prescription and you go to pick it up at the pharmacy. You opt for generics because you know they are as effective as brand-name drugs, and with your insurance plan, you only pay $15.00 to fill generic prescriptions. But because you didn’t ask and because the pharmacist generally cannot tell you, what you don’t know is if you paid cash for that same bottle of pills, you would only have to pay $11.23. That difference of $3.77 is the clawback.

A clawback is any extra money above and beyond what the cost of the drug is. That extra money goes right into the pockets of your insurance company and the pharmacy benefits manager. A recent paper published by the Leonard D. Schaeffer Center for Health Policy & Economics at USC titled “Overpaying For Prescription Drugs: The Copay Clawback Phenomenon” analyzed pharmacy claims and found in 2013 that 23% of the claims involved a patient co-payment that exceeded the average reimbursement paid by the insurer by more than $2.00, with the average overpayment working out to be $7.69. While overpayments happened on 28% of generic drug purchases, they also happened on 6% of brand-name drugs purchases so asking your pharmacist might end up saving you some money.

If you are afraid that it might slip your mind to ask the pharmacist what the cash price would be, you can always use to look up the price yourself before you pick up your prescription at your local pharmacy.