BIP Spring 2025

Industry Innovation

Balancing prescription discounts and insurance How brokers can help clients weigh immediate savings against long term insurance benefits when using prescription discount programs.

Additionally, Medicare Part D plans change annually, impacting coverage and costs. Harriett stresses the importance of reviewing plans each year to avoid unexpected price increases. “Your prescription drug plan can change significantly, even if the name stays the same,” he says. “A $5 plan this year could jump to $40 next year, and clients need to know that.” Annual reviews help ensure that individuals remain on the most cost-effective plan. Beyond individual savings, legislative efforts are underway to increase transparency in drug pricing. Vanderwolk notes initiatives like New Jersey’s PBM law, which requires entities involved in the pharmaceutical supply chain to disclose pricing data. The belief is that greater transparency could lead to market-driven corrections that ultimately benefit consumers. “Our goal with the bill was transparency — show your work,” he says. Practical strategies for managing ensure adequate coverage, both consumers and brokers can take proactive steps: • Verify coverage: Harriett advises checking whether medications are included in a plan’s formulary to avoid unexpected expenses. “If the insurance company isn’t covering it, it won’t count toward your cap,” he says. • Consider generic prescription costs To maximize savings and

Rising prescription drug costs remain a financial challenge for many Americans. To help mitigate expenses, prescription discount programs have gained popularity as a way for consumers to access lower drug prices. While these programs can offer cost savings, it is important to understand their implications, especially for Medicare beneficiaries. How Rx discount programs work Prescription discount programs negotiate lower medication prices, allowing consumers to purchase prescriptions at reduced rates. These discounts can sometimes result in significantly lower prices compared to insurance-covered costs. Christopher Vanderwolk, chair of NABIP’s Working Group to Lower Prescription Drug Costs, points to increased transparency in pricing as a key advantage. Greater visibility into drug pricing can help consumers make more informed financial decisions. “Mark Cuban’s Cost Plus Drugs is publishing drug price lists as a way to keep

everybody accountable,” he says. For individuals paying out-of-pocket, the savings can be considerable. Vanderwolk highlights cases where the cash price of a medication can be drastically lower than the price under an insurance plan. “There are real examples of drugs that are $11 cash but $2,000 on the plan,” he says. In such cases, paying cash may be a more cost-effective option. Considerations for Medicare beneficiaries While these discount programs can lower immediate costs, they do not count toward Medicare out-of-pocket limits or deductibles. Elie Harriett, an independent Medicare broker, emphasizes the significance of Medicare’s new $2,000 annual cap on out-of-pocket drug costs. “If you use those discount cards, you don’t get to count it toward the $2,000 cap on prescription drug costs,” Harriett says. This is an important factor for Medicare beneficiaries when considering how to manage their prescription expenses over the long term.

Remind clients to regularly

review their prescription drug plan’s formulary, even if they keep the same plan from year to year.

alternatives: Asking a doctor about lower-cost

Petmal / iStock

12 bip magazine Spring 2025