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AS A FAMILY MEDICINE physician associate, I frequently meet with patients early in the new year who are upset. The reason: They just learned their medications are no longer covered by their insurance or will cost significantly more than before. Many times, the insurance company will send them a letter providing other options to consider. I work with patients to find a generic substitute that isn’t as costly.
Several years ago, I had an elderly gentleman in our office one morning complaining that he was having difficulty urinating. This had been going on for a couple of weeks. While we were talking, I reviewed his medications and noticed that he had tamsulosin on the list. It’s used to treat an enlarged prostate.
I asked the gentleman if he’d been taking the tamsulosin. He said he quit taking it about three weeks before the onset of his symptoms. When I asked why, he told me that the refill was going to cost more than $200 at his retail pharmacy.
While we were talking, I looked up the cost of tamsulosin on GoodRx.com, the discount pharmacy site. I saw that the cash price for this medication at a grocery store pharmacy was $9.99 for 30 days.
The gentleman said $9.99 a month would work for him, so I printed the GoodRx.com coupon and gave it to him. Not all of my elderly patients are well-versed in using the internet or smartphone apps. They don’t know how to research the lowest-cost medications, so I frequently do the research for them and provide them with discount coupons for their prescriptions.
This encounter, and many others over the years, make me wonder why everything related to prescriptions and health care has to be so complicated. While there are many factors involved, a major one is the lack of price transparency by hospitals, pharmacies and insurance companies. It’s hard to comparison shop when drug prices are difficult to find or even unlisted.
Many patients are loyal to a certain major retail pharmacy that they’ve used for years. Unfortunately, when pricing drugs, many retail pharmacies charge a hefty premium for generic medications. Often, pharmacies can obtain a common generic for pennies, but then mark it up as they see fit. They usually aren’t able to do this as much with newer, branded medications.
Walmart came out with its $4 generic drug list a few years ago. That approach has since been mimicked by other pharmacies. With a few exceptions, the cost of many medications runs $4 for 30 days and $10 for a 90-day supply. Many patients are unaware that Walmart offers low-cost generics. In another significant savings, Medicare now pays for more commonly recommended vaccinations.
Many other drugs can be prohibitively expensive. Frequently, Medicare diabetic patients are on new, once-a-week injectable medications that cost $700 for three months. Patients with chronic obstructive pulmonary disease can be on inhalers that cost more than $400 a month.
Despite all of the creative advertising by pharmaceutical companies offering a discount card or coupon for many new medications, the majority of patients on Medicare don’t qualify. These advertised discounts only apply to patients with commercial insurance.
Adding to costs, many Medicare drug plans also have a coverage gap commonly referred to as the donut hole. In 2023, the donut hole begins after you and your drug plan have spent $4,660 on covered drugs and lasts until the cost of your prescription drugs reaches $7,400. While in the donut hole, a person will pay up to 25% of the retail price of a brand-name drug or generic drug.
Several years ago, I learned that pharmaceutical representatives can track the number of prescriptions that we write as health-care providers. Generally, they’re not very happy with me because I don’t prescribe many branded medications.
I try to use generics as much as possible. My goal is to be an advocate for the patient and not the pharmaceutical company. I prescribe medicines that I think are best for their health and their pocketbook.
I also educate patients to be aware of the difference between a drug being “covered” versus “paid for” by their insurance. Just because a medicine, procedure, lab test or vaccination may be covered doesn’t mean that it’s paid for in full.
Too often patients call our office upset after a lab test or vaccination because it wasn’t completely paid for by their insurance and they’ve received a surprise bill for, say, $200. I recommend that patients call their insurance company or pharmacy to find out the out-of-pocket cost before having anything done in a non-emergency medical setting.
Schaeffer Center researchers recently detailed that federal government and Medicare beneficiaries are overpaying for generic prescription medications. They determined that, “Medicare Part D stand-alone plans paid $2.6 billion more in 2018 for 184 common generic medications compared with prices for the same drugs available to cash-paying Costco members.”
Who benefits from the dysfunction of the health-care system? Among the big winners are the health insurance companies. This brings me to a topic that may raise your blood pressure: the compensation of health insurance CEOs. The chief executives of seven of the largest U.S. health insurance companies collectively earned more than $283 million in 2021.
It’s important to work with your health-care provider to receive the most appropriate medicine for your health needs without unnecessary cost. Be sure to ask if there’s a generic alternative to a branded medication that you’re prescribed. Then ask for the cash price at the pharmacy and compare that with the cost under your insurance plan.
Happily, there’s increasing competition in the prescription market, which can lead to lower prices. Providers getting into the generic medicine market include Amazon Pharmacy, Blueberry Pharmacy and CostPlus Drug Company. I hope such efforts will bring more transparency to all aspects of health care.
Scott Martin is a semi-retired family medicine physician associate (previously known as a physician assistant) and has been practicing medicine for the past 18 years. His previous career was in academia doing research and teaching at the University of Georgia. He and his wife enjoy traveling and spending time with family. Scott’s previous articles were On My Shoulders and Too Trusting.
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I managed benefit plans for many years and I agree with you. The PBMs that buy the drugs from the manufacturers and sell them to the pharmacies are simply drug dealers in suits.
My mom just entered memory care and is on medication management. So she must get her drugs in prepackaged pill packs from the pharmacy that the facility uses. How do we ask for generics through that pharmacy?
Anne, my mother has been in memory care for almost three years and her medications are also prepackaged. Everything that she currently takes is generic and fortunately not very expensive. My guess is the pharmacy will use generics when they can, but you might give them a call to make sure.
Also, for low cost generics investigate Mark Cuban’s pharmaceuticals https://costplusdrugs.com/. The cost won’t apply towards your deductible, but I have read that you can potentially save big $
Your effort at looking out for your patients’ health and pocketbooks is much appreciated. Last year I had a stubborn non-COVID cough that I could not shake using my Albuterol inhaler. My doctor prescribed a steroid inhaler that cost me $200, and once the package was opened it expired 30 days later. The medication was effective after utilizing for two weeks. This year I had a recurrence of the symptoms and researched alternatives and found a like- generic for much less which expired in about a year. It pays to be an informed advocate for yourself and your loved ones.
I find the best prices at Costco pharmacy.
If you want to know how dysfunctional our healthcare system is in this country, this book is an eye opener. It’s a few years old, but still very relevant.
“An American Sickness “, by Dr. Elizabeth Rosenthal
https://a.co/d/aXPv0dB
““Medicare Part D stand-alone plans paid $2.6 billion more in 2018 for 184 common generic medications compared with prices for the same drugs available to cash-paying Costco members.” In fact I just went through this myself. I am on Medicare Part D which I pay very little for and I guess I get what I pay for. When I was employed with a large corporation with great benefits, I paid relatively little for my 4 common maintenance medications and I used CVS Caremark for mail order Rx. When I went on Medicare I kept using Caremark and my costs went up significantly. I recently dug deeper using cost comparison tools and found I could save thousands annually by buying 2 drugs through GoodRx and 2 through Costco.
Scott – to your point about Rx costs, my dermatologist has provided me with several samples of a medication for a skin condition. I looked up the medication on GoodRX and was surprised to find that a 40 gram tube of the stuff is over $2,000. Vitiligo makes my arms look a bit weird, but it would take a miraculous change in my skin appearance to justify that kind of expense.
Jeff, have you tried any other medications for the vitiligo? There are generic relatively cheap alternatives to try first. Dermatologists deal with the high cost of new medications all the time. I would recommend calling the dermatology office and ask to try a cheaper alternative if you haven’t already tried it.
Scott – thanks for the suggestion. The less expensive treatments were tried first – – – I just didn’t know it. We’ve gone through a progression of creams. When he gave me the biologic samples I assumed they were just part of the progression.
https://www.nytimes.com/2022/09/03/your-money/student-loans-personal-finance.html?smid=url-share
Nice article great advice. You’re a good person. The above article is about student loans, but it also touches on health care in America. Which I believe explains a lot about all this confusion.
Why did this comment from Francis get 3 down-votes? Would you 3 please explain your vote?
Scott thanks for the tips. I was not aware about Wallmart and their drug price list. Its all about luck – as the years tick by one small oops can upset the whole apple cart and cause a negative cash flow. We all look forward to your next nugget of information.
BTW, you don’t have to be a Costco member to use their pharmacy. Just tell the person at the entrance that you are going to the pharmacy and they will wave you in. I did join this year because I wanted to get hearing aids there (great decision) but I have been getting my drugs there for years. Mine only accepts Visa credit cards for payment, so do check.
On the topic of healthcare , I just got a bill from LABCORP as Medicare said the services were not medically necessary. After many calls, I was told I could APPEAL the issue so I am waiting for the information from Medicare.LABCORP did not tell me I could APPEAL. As well many pts do not realize their COPAYS could be more than RETAIL with GOOD RX, COSTCO, and others and CVS or WALGREENS will not tell you so!!!!
I would talk to your doctor’s office. It could be a coding error. I have never had a lab test denied by Medicare as the doctor’s office submitted it as medically necessary.
Good luck with that. Onerous process. You should talk to whomever ordered the tests too
Exceptionally appreciated comments & information Scott. I often wonder what folks did before ‘Pharma’s face in as an inital treatment option today. Then I consider diets back in the 1940/50s. Quite perplexing.
This article reminds me of now jailed CEO Martin Shkreli who raised Daraprim by 5000%. Senator Joe Manchin’s daughter, Heather Bresch former CEO of Mylan, and her part in the EpiPen price increase fiasco. And Purdue Pharma and their OxyContin opioid crisis.
Another problem with Medicare drug plans is the lack of an annual out of pocket maximum. If, like me, you are on a Tier 5 drug (i.e. brand name and expensive) you typically pay 25% or 30% of retail during initial coverage, 25% of retail in the coverage gap, and 5% of retail in catastrophic coverage, which I reach in March. Retail for my rheumatoid arthritis drug is over $6,000 a month and its hardly the most expensive. The Medicare Advantage plan offered by my ex-employer currently charges $10.35 per prescription in catastrophic coverage, but none of the Part D plans available in my zip code do, although Medicare allows it.
There will be
Thanks for the blog. I’m blessed that in retirement that I only take one RX drug. I have found that AmazonRX offers me the best pricing based on their retail price. So I can buy from AmazonRX without insurance less than I can buy from the local chain drug store with insurance. I don’t blame the local drug store or the pharmaceutical companies…..it’s our system that is the culprit. Companies are simple doing what companies do in a free enterprise system.
“.it’s our system that is the culprit. Companies are simple doing what companies do in a free enterprise system.”—you are right. Let’s not ‘fix’ the system but change it completely. Look at systems that work for the patient and implement them; we don’t need to invent one and make mistakes while doing so. Canada, UK, Germany, Netherlands, etc.
Charlie, I am with you. Drug stores and pharmaceutical companies are just trying to make money in a system that encourages making money.
AmazonRX, Costco/Sam’s, and CostPlus Drug Company all have tremendously lowered the price of many medications. (I hadn’t yet heard of the Blueberry Pharmacy Scott mentioned but I will check them out.)
I always chuckle when I hear politicians crying for “increasing competition” when they are wrestling with health care issues … it is laughable to think someone could realistically comparison shop medical procedures and their prices … there is zero transparency
One area that is worth checking on prices is imaging (x-rays, CT, MRI, etc). Many times the independent imaging centers charge far less than a hospital owned facility. In our community, the same group of radiologists read the images for the independent centers as well as for both hospitals. However, if you see a specialist or primary care provider that is affiliated with a hospital they are going to be mandated to use the hospital radiology department in most instances.
True, if there were and you were seriously ill, would you be shopping for the lowest price?
Well in my almost 70 years I have never been “seriously ill” … So the many procedures (colonoscopies, echo cardiograms, lithotripsies, mris) etc I have had – sure I would have shopped them if possible
Nothing stopping anyone from calling provider getting their charge and the procedure code and calling their insurance to see what they allow and if the provider is obligated to accept the payment as payment in full. On the other hand, if you went to a network provider You don’t receive a balance bill so what does it matter?
Congratulations on your good luck. Try to imagine shopping for coverage on your way to the emergency room after an accident or a stroke. If you are unconscious you won’t even get to choose the emergency room.
I have Merck, Abbvie, CVS, Pfizer, Organon, and Viatris. They may overcharge their customers and use all kinds of tricks to make money, but every quarter they deposit some of the fat profits they get in my brokerage account.
I would prefer if this weren’t necessary, but in the system we have, sometimes you have to howl with the wolves.
Thank you, Scott, for your (generic) advice. Your patients are lucky to have your advocacy.
I recently completed at least a forty hour work week of due diligence trying to understand Medicare/Medigap/Advantage/PPO plan options as I prepare to turn 65. That included comparing drug formularies of the various plans. One piece of advice I picked up along the way is that plan participants should bring their formularies to health care appointments, requesting providers prescribe from the formulary whenever possible.
The I time spent digging into healthcare options was, I believe, time well spent. I’d like to think it will save money and prevent future heartache. But I shudder to think how much more difficult navigating the healthcare system will become as I age.
Unfortunately, while you can change your drug plan only once a year, the plan can change its formulary whenever it likes. It does have to give you notice….
If you sign up for Medicare Advantage you should check your options each year, but when you sign up for a Medigap plan there is no reason to change it.
Deciding on a Part D plan is very difficult as they keep changing their formularies. And you make be taking a new drug AFTER you enroll. Basic supplement coverage is easy.
Glad to read this article. As someone who managed employer health plans for many years, I have heard all these complaints from the other side – employees complaining about their coverage and what they had to pay out of pocket.
When my former employer dropped our Medicare supplement coverage and replaced it with an annual HRA contribution many retirees were shocked at what they now had to pay under Part D – in some cases going from $20 to $600 per month. I recently went to fill a script and was told it was $595. GoodRx made it $195.
You are right, it is the patient’s responsibility to know how their coverage works especially out of pocket costs. No one should expect services to always be free. On the other hand, finding out the exact amount in advance is very difficult in many cases.
HOWEVER, you are off base in your comments about health insurers and CEOs because:
Most large employers – 60% – are self-insured and thus the insurance company paying claims has no stake or risk in the spending on claims. Their income is based on a fixed administrative fee paid by plan sponsor.
The profit margins for health insurance companies are about the same as regulated utility companies. When aggregate profits increase it’s more about increasing volume than higher prices or denying claims. Insurance companies are not the problem.
CEO pay is irrelevant when it comes to premiums people pay. Divide that pay by all the policies in effect and you will see the result is negligible. I once did the calculation for a large insurer and in that case if the CEO compensation was zero, premiums would be offset by about $15 a year. If you divide the total compensation of the GM CEO ($29 million) by the total vehicles sold it comes to $4.88 per vehicle-much less if you use salary only. Also, like all CEOs 60% or so of their compensation is stock awards, thus the cost is borne by shareholders.
Turning to the insurance company as the problem when it comes to health care costs may be popular, but we are looking in the wrong place.
Thanks for your comments. It is interesting that of all the things I discussed in my article that you had concerns with one paragraph about health insurance CEO compensation (average of $40 million in 2021).
I respectfully disagree with your comment that we are looking in the wrong place regarding health insurance companies. They are not the whole problem but they sure have an active role in health care costs from my perspective as a healthcare provider. You mention 60% of the large employers are self-insured. What about the remaining 40% and/or small companies?
We do not spend most of our time in the clinic seeing patients. We spend most of our time documenting in the electronic medical records (EMR) system after a full day of seeing patients either after hours or at home. Studies have shown that for every 15 minutes we spend with the patient, we spend another 30+ minutes documenting in the EMR. We are also addressing frequent roadblocks from insurance companies (i.e., won’t pay for imaging or a medication that we deem medically necessary). Multiply this by 15 to 20 patients a day in some instances.
Our family medicine group is not affiliated with any hospital, so it is up to the partner physicians to pay for all staff including those involved with dealing with insurance companies. The second floor of our building is dedicated to five staff members that spend all day every day dealing with insurance issues. They make sure that we are using the appropriate codes in our EMR so that we can get reimbursed appropriately. If it weren’t for the health insurance situation our group would not need to spend the resources on five team members to make sure that we get paid for our hard work.
In addition, our office has a medical assistant dedicated to addressing insurance “prior authorizations” for patient medications every day. The insurance companies do not pay for this service our office does, but they mandate the prior authorizations. A few years ago our office instituted a $25 fee for prior authorizations in order to help offset the cost since our group is paying the salary and benefits for the medical assistant.
While CEO pay may be irrelevant as you state, the optics of what they make does not go over well with most hard working or retired people. I am afraid that most of my patients will give me the “deer in the headlights” look if I used your explanation for CEO compensation. Speaking of optics, I learned today that the Buffalo Bills stadium is named Highmark Blue Cross Blue Shield Stadium after the health insurer (https://www.sportsbusinessjournal.com/SB-Blogs/Breaking-News/2021/03/Bills.aspx).
No doubt dealing with insurers is a big hassle and a pain in the neck for providers. But employers and patients want lower premiums, patients want limited or no out of pocket costs and providers want higher fee payments.
Insurers try to keep costs lower and nobody is happy with that. Medicare simply sets fees lower than private insurance. Providers aren’t happy with that either.
yes its the optics which are often misleading so we shouldn’t encourage that.
Insurance companies are in business to make money. Period. They try to keep their costs low and profits high by outsourcing bookkeeping to the providers and denying care to patients. This is American exceptionalism.
Sorry, simply not true. It’s what many people believe or want to believe, but not so. Technically speaking insurance never denies care, they deny paying for it at times because it’s either not covered or of questionable necessity or somebody screwed up.
Every health care system does that, some far more aggressively than in the US.
See: https://www.kff.org/private-insurance/issue-brief/claims-denials-and-appeals-in-aca-marketplace-plans/
CEO pay in general is out of control. Medical insurance companies add significant overhead to everyone’s health care costs, one reason health care in the US is twice as expensive, with worse outcomes, than in other “developed” countries. It is my understanding that each drug covered by given plan can have a different negotiated cost at each pharmacy. When I use the tool on my insurer’s website to see the cost of my medication, each pharmacy is different. The overhead for that to happen benefits no-one.
Who cares what a CEO makes. It is not a factor in higher health care costs. Look to physician incomes relative to Europe for example. Look to the volume of care in the US, the incentives both income and defensive to provide more care. Consider what Americans demand in their care and convenience. Those are some if the real drivers.