The Lowdown on Prescription Discount Cards Posted: March 4th, 2010
America's health insurance crisis has some consumers scrambling for ways to save money on medical costs. Federal economists estimate that Americans spend more than $2.5 trillion every year on health care -- that's over one-sixth of the nation's gross domestic product.
Most of us have taken on bigger shares of our own health care costs, especially after a wave of layoffs and corporate cost-cutting that significantly reduced employers' medical expenses through the early 2000s. For many consumers, prescription discount cards can ease the burden of paying for routine medications, while cushioning the blow of unexpected medical bills.
Prescription discount cards first became widely known in the United States in the early 2000s, when lawmakers enacted changes to Medicare coverage. Designed to foster competition among drug makers while streamlining federal subsidies, Medicare prescription benefit programs allowed participants to significantly reduce out-of-pocket costs on covered medications. Adoption rates for new programs soared, encouraging pharmacies and manufacturers to launch discount programs for general consumers. Today, a variety of companies offer cards as part of their marketing strategies, as well as to qualify for cash from Washington.
How Prescription Discount Cards Differ from Traditional Health Insurance
Although some discount drug plans can resemble cheap health insurance plans, regulators advise consumers to understand a few major distinctions:
- Prescription discount cards can reduce routine expenses but they don't provide the same coverage as traditional health insurance
- Some drug discount programs get funding from government subsidies, requiring participants to meet eligibility guidelines that can include age, occupation, or residency
- Manufacturer-sponsored prescription discount cards cut prices on that company's drugs. Patients on multiple routine medications must either consolidate their prescriptions to a single manufacturer or subscribe to more than one discount program
Understanding the scope and the limitations of a prescription discount card before signing up can help you get the most value for your money. Legitimate prescription discount programs work in conjunction with health insurance plans, but don't replace them.
When Would You Need Prescription Discount Cards?
Prescription discount cards can save you the most money when used to manage routine health care needs. For instance, if your doctor prescribes a regimen of medications from the same manufacturer, signing up for that company's discount drug plan can save hundreds of dollars in annual health care costs. Drug makers have discovered that shifting marketing money from advertising to discount plans builds long-term loyalty and higher profits. Even some of the free manufacturer-sponsored discount programs can help you save money, just by putting yourself on a routine.
You can also save money with prescription discount cards during a sudden health crisis. Many state-sponsored, free health insurance programs also provide access to no-cost or low-cost prescription discount cards. Signing up isn't always automatic, so it pays to check with your insurer or with your state health commissioner's office to find out whether you qualify.
Best of all, some discount drug cards work in conjunction with your insurance policy, so you can save even more money. Many insurers provide automatic enrollment into their own programs, but it still pays to investigate whether a third-party discount program can offer you additional savings.
What to Look for in a Prescription Discount Card
Just as the cheapest health insurance isn't always the best plan for your needs, making a decision about prescription discount cards on price alone could end up costing you more money in the long run. Experts advise choosing from competing programs based on three criteria:
- Selection. The prescription discount card with the widest variety of available drugs isn't always the best deal. Look for cards and programs that offer deeper discounts on the medications you already use, on drugs you're more likely to require in the future, or on generic prescriptions.
- Value. Don't confuse prescription discount plans with cheap medical insurance. Fee-based programs should provide a clear savings over full-price medications.
- Convenience. Some prescription discount cards require enrollment in 90-day supply programs instead of offering monthly refills. Some programs fulfill prescriptions by mail, while others allow you to pick up orders at neighborhood pharmacies.
Like any loyalty program, you're trading the freedom of purchasing medications anytime, anywhere for the savings of working through a tighter system.
Finding the Best Value Among Prescription Discount Cards
Choosing from hundreds of discount cards on the market might seem as complex as sifting through dozens of free health insurance quotes. In most cases, you can find the best deal on a discount drug program by working with a company you already patronize, like a particular pharmacy or drug manufacturer.
Some of the most popular and affordable prescription programs include cards and discounts offered by:
- Retailers: CVS/Caremark, Walgreens, Target, Wal-Mart, and RiteAid
- Drug Manufacturers: AstraZeneca, GlaxoSmithKline, and Pfizer
- Associations: AARP, AAA, and many professional associations
- State and Local Governments: New York, Florida, and Arizona lead the country in sponsoring drug discounts for residents
- Insurance Providers: UnitedHealthcare, Kaiser Permanente, and Humana
Medicare participants can use a free prescription drug-plan finder to review choices available from state-to-state. If you qualify for state or federal assistance, you may also qualify for special, no-cost programs that offer deeper discounts and free medications. As Americans get better at pinching pennies, prescription discount cards offer tremendous opportunity to keep our personal health care costs from spiraling out of control.
Joe Taylor Jr.
Joe Taylor Jr. is an internal business consultant for a Fortune 500 company, who writes about finance, culture, and design. He holds a Bachelor of Science in Communications from Ithaca College.