Health Insurance With Prescription Drug Coverage

Finding a suitable health insurance plan can be difficult for many consumers. However, obtaining reliable medical insurance with adequate prescription coverage requires even more due diligence. The problem lies in the fact that consumers taking several prescriptions are likely to have preexisting conditions or poor health. Poor health and/or several preexisting conditions may cause the insurance company to decline the application.

Assuming the potential insured is in moderately good health, he or she will have several health plans with rx coverage to choose from. Those under age 65 and in the individual and family market can choose from traditional plans and health savings accounts. And those above age 65 or on disability can choose from several prescription Part D insurance plans.

Prescriptions Coverage Tiers

Many plans cover generic drugs ($15 co-pay is most common) without the insured first reaching a predetermined deductible. Preferred name brand drugs and non-preferred name brand drugs usually have close to $25 and $50 co-pays respectively. However, in order to be eligible for the co-pay amount with name brand drugs, a predetermined deductible (not the policy deductible) will need to be met first. This amount is usually between $100 and $250 depending on the insurance carrier.

More recently, health carriers have also introduced a 4th tier. This tier usually includes the more expensive drugs or newer drugs that have just been approved. The insured will be responsible for a percentage of the cost of Tier 4 medications, usually 25%.

It should also be noted that many health insurance companies have a calendar year maximum in prescription benefit payouts. It is not uncommon for drug benefits to cease if the insured reaches $5000 in prescription benefits in a given year. However, some plans will allow, at an additional cost, a buy-up provision that has no maximum in yearly RX benefits.

Health Savings Accounts and Prescriptions

Typically, health insurance plans coupled with a health savings account will offer no prescription drug coverage until the policy deductible has been met. This is unlike the traditional plans described above in that traditional plans have prescription specific deductibles unrelated to the overall policy deductible. HSA plans will only provide drug coverage when the policy deductible has been met. Health savings account plans are advantageous for health consumers who are not worried about immediate drug coverage and who also want to keep their premiums low.

Group Health Insurance and RX Coverage

When a group is selecting a health insurance plan for their employees, the administrator will usually have three or more prescription options to couple with their group policy. A simple way to describe plan offerings in the group market is high, medium, and low. Companies wanting to offer the best drug coverage will select a "high" coverage plan for their employees. Of course, the better the plan, the more expensive it will be for the group. Agents specializing in group health insurance will be able to provide information and descriptions of the options available from various insurance carriers.

Minimizing Your Prescription Drug Costs With a Health Savings Account

Starting in 2006, no plans that are qualified to work with a health savings account may cover prescription drugs as an insured benefit until after the deductible is met. So for HSA owners, one of your biggest health expenses could be for prescription drugs. Here are some ways to reduce those costs.

Generics

A report was published this week by Express Scripts Inc., a pharmacy benefit manager, indicating that increased use of generic drugs would save consumers $24 billion in 2005. Generic drugs cost an average of $60 less per month, than brand name drugs.

A report was published this week by Express Scripts Inc., a pharmacy benefit manager, indicating that increased use of generic drugs would save consumers $24 billion in 2005. Generic drugs cost an average of $60 less per month, than brand name drugs.

It is important to understand that brand name drugs often have little or no benefit over older generic versions. A prime example is Prilosec, a heartburn medication whose patent was scheduled to expire in April of 2001. Prilosec consists of two "isomers", a right-hand version and a left hand version. Studies showed an 87% success rate for this drug. AstraZeneca, the manufacturer, decided to offer a newly patented single isomer version called Nexium, which showed only fractionally better results with a 90% success rate.

A $500 million marketing campaign ensued, aimed at both physicians and consumers, to convince them that Nexium is "state-of-the-art". AstraZeneca now sells over $3 billion worth of pills annually, at $120 per box. This is a drug that is essentially only a repackaged version Prilosec, which sells for about $20 per box.

When your doctor is prescribing a drug, make sure to ask him if there is any benefit to taking a brand name over a generic, and let it be known that you'll be paying for the prescription out of your own pocket.

Drug Discount Programs

Pharmaceutical prices are a lot like hospital prices - very few people actually pay the listed retail price. There are numerous drug discount cards available on the market, which provide savings that average 15% to 40% below retail at participating pharmacies. Typically, most of the chain pharmacies (CVS, Eckerd, Walmart, Kroger, Costco, etc.) participate in these plans.

Many insurance companies include discount cards as an additional benefit that comes with their coverage. Because these cards are not considered to be insurance, they can be offered with an HSA-qualified plan. Insurance companies that provide Rx discount cards with their HSA plans include American Medical Security, Anthem Blue Cross Blue Shield, Assurant, Golden Rule, Imerica, Unicare, and World. We also know of one HSA administrator - - that provides a drug discount program to people who use them.

Stand-alone drug discount plans are also available to anyone with access to the internet. We've found the average cost of these discount plans to be around $7 or $8 a month.

Mail Order

If the need for a prescription is not urgent, or if you are on long-term medication, mail order is almost always a less expensive way to buy prescription drugs. It is generally cheaper to get a 90-day supply because of a volume discount. I recommend asking your physician to write the prescription for a 3-monthly supply plus three refills. This will get you a year's worth of drugs, with only one shipping fee.

Importing Prescription Drugs

The city of Boston, the city of San Francisco, the state of Wisconsin, and the State of Minnesota all use a company called Total Pharmacy Care to give their citizens access to international mail-order pharmaceuticals.

Officially, re-importation of prescription drugs by anyone other than the drug's manufacturer is a violation of federal law. But FDA enforcement guidelines allow agents to exercise discretion for drugs imported for personal use. According to the guidelines, "FDA personnel may consider a more permissive policy" in cases where an individual seeks to import no more than a three month supply of a product that does not appear to pose an unreasonable risk, if the individual affirms in writing that it is for personal use and provides the name and address of the U.S. doctor supervising their treatment.

Advocacy groups cite these guidelines as proof that re-importation is legal. But in a February 2003 letter, the FDA's Associate Commissioner, Thomas Hubbard, said the guidelines have been misinterpreted. They were meant to allow FDA agents discretion in allowing U.S. citizens access to medicines for serious conditions that were unavailable or hard to find in the states, not to allow international comparison price shopping.

Nevertheless, thousands of U.S. citizens have found they can save money by buying their drugs from outside the country. Keep in mind that since this importation is technically illegal (though rarely enforced), it may not be proper to use your HSA to pay for prescriptions purchased this way. Talk to your accountant if you decide to go this route.

Avoiding Prescription Drugs

The people who spend the least on prescription drugs are those who rarely take them. The need to take an antibiotic for an acute infection may seem fairly expensive, but it is nothing compared to the cost of taking a medication for the rest of your life. Unfortunately, by age 45 over half of all Americans are on a regular prescription medication, and by age 65 nearly half are on three or more prescriptions during any given month. Most of this is entirely preventable.

Some of the biggest selling drugs are to treat elevated cholesterol, hypertension, and acid reflux. A paper published this year in the American Journal of Clinical Nutrition entitled Origins and evolution of the western diet: Health implications for the 21st century, explains how these and other common health issues did not exist for our hunter-gatherer ancestors, and how diet is the root cause of so many of the health problems people in our culture experience.no prescription needed drugs

The author is Dr. Loren Cordain, one of my professors at Colorado State University. In a nutshell, he shows why the healthiest diet is one based on fruits, vegetables, fish, and lean meat. Foods to be avoided or limited include added sugars, shortening and other processed vegetable oils, grains, and legumes. These are all foods that did not exist in our diet prior to about 10,000 years ago, and are thus foods that we are not genetically adapted to eat.

Remember that all qualified expenses, including prescription drugs, can be paid for tax-free, from your HSA. If you've still got a traditional health insurance policy and would like to investigate a health savings account, please visit us at HSA for America and we'll be happy to help you.