How to Pay Less for Your Prescriptions and Brace for a Health Insurance Shake-Up

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0:29Dan Weissmann:See terms. Have you ever gone to pick up a prescription and found it cost much more than you were expecting, or your insurance suddenly decided to stop paying for your medicine?

0:38Elizabeth Ayoola:The former has happened, Sean, and unfortunately I had to pay for it because I still needed the prescription. So what's a girl to do?

0:45Dan Weissmann:Yeah, what a bind. Well, I know a lot of folks have found themselves in the same exact situation, so this episode we'll have some tips for how people can make prescriptions a little more manageable.

0:58Dan Weissmann:Welcome to NerdWallet's Smart Money Podcast, where you send us your money questions and we answer them with the help of our genius nerds. I'm Sean Piles.

1:06Elizabeth Ayoola:And I'm Elizabeth Ayola. This episode, we answer listeners' question about how to manage healthcare expenses if healthcare tax credits expire later this year, which is expected to make Affordable Care Act plans 75 % more expensive on average.

1:21Dan Weissmann:But first, we're going to dive deep into another aspect of healthcare, prescription drugs. I don't know about you, Elizabeth, but paying for prescriptions can sometimes feel like a weird hybrid game of hide-and-seek and whack-a-mole. Like, it's hard to find the best price for your prescription, and then once you have it settled, your insurance suddenly decides to change the pricing or drop coverage for the drug entirely.

1:42Elizabeth Ayoola:This sounds like a nightmare. I mean, luckily, I don't have prescription drugs often, but the few times I have, I've been shocked at the cost of them. Now, as a girl coming from London where we had universal health care, I still marvel at how much I pay out of pocket for prescriptions and how much work can go into finding a cost effective option.

2:00Dan Weissmann:Well, this episode, we're joined by Dan Weissman, host of the NPR podcast, An Arm and a Leg, which helps listeners navigate the truly dysfunctional and absolutely maddening world of health care in the United States. Dan's going to help us figure out how to make these often vital prescriptions a little more affordable. Dan, welcome to Smart Money. Thanks for having me. So you did a really helpful two-part series just about how people can navigate the cost of prescription drugs. And even though you said folks don't need to take notes because you have a really helpful newsletter, I was taking notes while listening to your podcast.

2:31Dan Weissmann:But before we get into your tips that I think are just super helpful for everyone, I'd love if we could just zoom out a little bit and hear from you why prescription drugs are just so expensive in the United States. I mean, we are paying a lot more for the same drugs than folks in other countries. Prescription drugs are part of our whole health care system, obviously, which is unlike the health care systems of other developed countries more than any other place. We're just like, let the market figure things out and we'll and the government will do a little regulation and supplement with things like Medicare and Medicaid.

3:01Dan Weissmann:but the market will do its thing is a kind of basic idea. And when I started making an arm and a leg, I was like, yeah, what's the deal with the cost of health here? This is like a whole subgenre of the show Planet Money. Like why market failures? Like what happens when markets don't actually solve problems except for like shareholders? So here we are. There's kind of two big sets of players in the world of prescription drugs. And one of them we know well, the makers of pharmaceuticals who can charge whatever price they want because it's a free country in that or a free market country in that respect.

3:37Dan Weissmann:And the other is a set of players that most of us don't know about called pharmacy benefit managers. And these are entities that essentially subcontract or used to subcontract to insurance companies. Many of them are now essentially owned by or own insurance companies like Cigna and Aetna and others and United Health Group. all the three of them own or are owned by the three biggest pharmacy benefit managers. So just to let you know, that's a big piece of the puzzle is we have this. Not only do we have a big corporate health care system, it's consolidated more and more. So those guys, their job is to say like, oh, our insurance plan obviously has to cover prescription drugs.

4:15Dan Weissmann:Which ones will we pay for? How much will our people that we cover pay for this drug versus that drug, this ADHD drug versus that ADHD drug, this blood pressure drug versus that blood pressure drug. We could go on a very long time about this, but essentially the pharmacy benefit managers have the job of getting the best deal for themselves and the insurer, but not necessarily making sure that you get the medicine that you need at a price you can afford. They make more money other ways. So we are caught essentially between the rock of the pharma companies who are beholden to their shareholders and a hard place of the pharmacy benefit managers who are beholden to the shareholders of the giant companies that they're parts of.

4:56Dan Weissmann:The system is not designed to give us the care we need at a cost that we can afford. It's designed to create profits, and it does that really, really well.

5:05Elizabeth Ayoola:So you made a good point, Dan, which is that these systems aren't necessarily caring about how much it's going to cost the consumer out of pocket to pay for these drugs. Can you outline some of the common challenges people face when trying to get prescription drugs? Is it that their insurance denies their coverage or that even with insurance, the drugs are too expensive? Or is it both?

5:24Dan Weissmann:It's both. It's all of the above. And things can seem so backwards that if you're taking what your pharmacy benefit manager considers to be the wrong drug, the price to you can be super enormous. And there may be places you could get that same drug outside of using your insurance for a lot less.

5:42Elizabeth Ayoola:So then how would someone be able to determine which one is the best route then? What kind of research do they need to do?

5:48Dan Weissmann:Oh, boy. Yeah. So we, at the beginning of this year, asked our listeners and a bunch of experts, and a bunch of our listeners are experts, like, what have you done when you've gotten this kind of sticker shock at the pharmacy counter? And people told us all kinds of things. And it was super interesting. It's a dizzying array of strategies. And I think the thing that I came away from it most, make me tell you some of the details that we got, but is that you start with the things that are the kind of easiest. It's kind of like when your doctor is like, well, have you tried taking some Advil or have you tried turning your computer off and turning it back on again?

6:20Dan Weissmann:And this list by itself is a bit of a pain. But the kind of quote unquote easy things are like you show up, the pharmacist like that's going to be five hundred dollars. And this is your chance to ask, hey, could you run my insurance one more time just to see if it's up to date? That happened to me once. It was super interesting. It went from four hundred dollars to five. Shut the front door. Yeah, it was January. and the Walgreens just hadn't taken to my new insurance yet. And they were like, our price based on what we do with this old line prescription drug is cash,$400. And what I found from looking at coupons online from sites like GoodRx was that I could have gone a couple of miles down the road to another place with no insurance and paid$20 for the same thing.

7:04Elizabeth Ayoola:Oh, wow.

7:04Dan Weissmann:So that's a next step is like, have you got my insurance right? Like, and let me check my phone for a second. GoodRx is one of a number of sites, and each of them has different deals that will tell you, if you kind of scan the barcode from our site at your pharmacy, at the pharmacy you're at, it's going to cost you X. At the pharmacy down the road, it could cost you Y. Using GoodRx I found to be really helpful, but it always underlines how much of a sham the system is, where if I just drive half a mile down the road to a Walgreens versus the CVS that I'm currently at, I can't save a lot of money on what is the same exact drug.

7:41Dan Weissmann:And I'm always wondering, why is that the case? Why do these companies, GoodRx and the other ones work in this way? Are they selling my marketing data? What's the catch? Yeah, it's super interesting. Basically, each one of them is negotiating behind the scenes with different pharmacy benefit managers. And they're saying, oh, you have this array where like on the back end, it's super complicated, but like money moves around. And when Dan pays$5 at the counter for this medicine, like you get two dollars out of that and you know you can kick us a nickel it's fine right that's how that works for them and they're doing all that stuff in the back end so eat good rx is one there's several others worth looking up we have notes on our website but like yeah look it up like can i get a better deal someplace else another question you can ask the pharmacist right then you can ask the pharmacist right then and there's like hey is there like a manufacturer's coupon for this thing often there is for brand name drugs often and you know what's in it for them the brand name drug company wants to give you a coupon to make up your share of the kind of co-pay or whatever, because eventually they figure your insurance will kick in.

8:47Dan Weissmann:And then finally, the other question you ask the pharmacist is like, hey, is there some other version of this kind of drug that my insurance will cover?

8:56Elizabeth Ayoola:Dan, in your two-part series, you mentioned how your mileage may vary. So how can people determine which options might give them the best mileage?

9:04Dan Weissmann:trial and error. So this is why I'm like, okay, you got get your list of the quote unquote, easy things first, do the easy things. And you can do these things pretty quickly. You can run down this part of the checklist in a few minutes if you have it handy. Hey, pharmacist, is there a coupon for this thing? Hey, pharmacist, my this asthma medication that I've been taking is supposed to cost me$500. Now, does my insurance cover some other inhaler that works just as good that I could use. I mean, this is all right here. Like, let me look at my phone for a second and see if I can go to CVS down the road and get this for less.

9:40Dan Weissmann:And then like, those are all things you can do pretty quickly. There are other websites like Mark Cuban's cost plus drugs, which is a mail order site for many generic drugs will give you a super good deal. You're going to pay five bucks for shipping. So it kind of works best, I think, for people who take multiple generic drugs and whose insurance is kind of like not making that easy for them. But if that's your situation, that could be great for you. One listener that we talked to, you know, had to go farther, right? His daughter's medicine, the insurance company was like, the best we can do for you, it's like 150 bucks.

10:18Dan Weissmann:And that was a lot. And he was like, can I get a better deal by using one of these good Rx type sites or Mark Cuban's cost plus? And he built a spreadsheet. He was like, OK, I'm going to look at all of them and see what the best deal is, where and like we adapted and expanded that spreadsheet. You can do that. That's obviously more homework, but the easy parts that you can do at the pharmacy and then there's like, okay, I got to go and crank on this. So one is like, all right, my insurance isn't doing it for me. I'm going to make a spreadsheet. I'm going to figure this out. What's my best deal?

10:49Dan Weissmann:The next level is, or another level at the same time is like, all right, my insurance said no to this. As one listener said, like, you should do is like, I'm going to take that as a suggestion, right? It's not an answer. That's a suggestion. They're saying, no, I'm like, okay, well, let's, let's talk about that. I mean, they will have their rationale. This is where you get your provider involved. And, you know, this is a problem for a lot of us. Like my primary care doc, love the guy. It's a bit of work to get him on the phone, right? This is a problem. A lot of us have, but so you're going to look for somebody who can do that for you.

11:27Dan Weissmann:And especially if you're taking the drug with a specialist, like you can get this help from them and be like, let's do an appeal. And there are rounds of appeals you can do. All these things take time, right? Like you're like, hey, my physician is fighting for an appeal. But meanwhile, I need this medicine now. Like I can't breathe without this inhaler. This is where you ask your provider a second question. Do you get any free samples from the pharma company that tied me over while we're doing this? Right. This was this was a suggestion that came from a listener who's a farmer rep. So, you know, that's his job.

11:58Dan Weissmann:They may well have the inhaler in the office and they can just give you one until you can sort through all of the issues with your insurance. Yes, and it's not going to be necessarily a permanent solution. I mean, they may be like, I got a closet of these, Dan, come back every week, it's totally fine. Or they may be like, I hate farmer reps or our whole system does not allow farmer reps in the complex that we operate. Apparently, they could still go online for you and say, could somebody please drop off these samples for Dan? But the idea here is not that this is a kind of permanent supply for you, but that it's while you're fighting with your insurance to get them to come around and be like, okay, we will cover this for you because this is the drug you need.

12:42Dan Weissmann:We thought you could take that other asthma medication. You and your doctor have convinced us that that one has a specific risk for you. You need this one. So basically at every step of the process, you need to be not taking no for an answer and finding some sort of other alternative route. So Dan, looking ahead, open enrollment is going to be here pretty soon. What should folks do now so they can ensure that their prescriptions are actually covered by their insurance next year? This is such an important question. So there's a document that you are legally entitled to see from whatever your insurance is or any insurance plan that you're considering for next year is called the formulary.

13:21Dan Weissmann:And it's going to be a long PDF. And you may have to ask somebody where you find it, but you're entitled to have it. It is the list that says, if you're taking this drug, it's going to cost you this much. If you take that drug, it's going to cost you that much. And these things can be confusing. And last year, I spent several, I spent a morning trying to figure out why I'd gone to one pharmacy and paid$35 for this drug. And the next month, I'd gone to slightly different pharmacy and paid$75 for it. And I eventually figured it out. That was some advanced stuff. But generally, you can see it like they're it's they're broken into classes like these are the statins.

13:54Dan Weissmann:These are the blood pressure drugs. These are the antidepressants. And they list every single one. And generally, the formulary will say rather than have a dollar amount, it'll have what are called tiers. So like tier one drugs, you pay five dollars for tier two drugs, you pay twenty dollars for tier three drugs, you pay fifty dollars for. Tier four drugs, you pay 20 % of whatever. And again, those numbers are going to be different for every insurance plan, but they all have tiers and you will find your drug. You'll do a control F hit find on that PDF and find the name of the medicine that you need or the class of medicine that you need.

14:30Dan Weissmann:And it'll tell you. And that if you are lucky enough to be able to choose an insurance policy and that formula tells you, hey, man, next year your inhaler is going to be 500 bucks, you can be like, OK, cool. Let me just check. There's another policy I have access to if there's a if they will let me have that inhaler or less. Or if this if the formula for this one is like, but you could have this other inhaler for 20 bucks, do it now. Right. Call your doctor and be like, hey, doc, would this other inhaler work for me? Another time we have to do a lot of homework to get what you would hope would be basic and just given from your insurance.

15:07Dan Weissmann:Well, Dan, And thank you so much for coming on and sharing your insights with us. I'm really going to encourage our listeners to check out that two-part series that you guys put out. I found it, again, extremely helpful.

15:17Elizabeth Ayoola:Thank you so much. All right. We're about to get into this episode's money question, where we talk about what folks need to know about potential changes to the cost of their Affordable Care Act plans.

15:28Dan Weissmann:But before we move on, a quick reminder to send us your money questions. We're at a transitional moment in the year where summer is beginning to wind down. We're looking forward to fall. At least I know I am. I really want to wear a sweater and stop sweating. And with this new time of year comes a new batch of financial decisions. Like, how should I navigate tariffs this holiday shopping season? Should I change my health care plan to I'm eligible for an HSA? And when is the best time to buy tickets for holiday travel? Elizabeth, do you have any money questions at the moment?

15:57Elizabeth Ayoola:Well, this is kind of random, but I do. I'm wondering how to negotiate the best rental agreement because I'm tired of paying to cut my grass. yeah I've also been thinking about how to ensure your emergency fund keeps pace with inflation

16:09Dan Weissmann:well we know those high-yield savings accounts we always talk about are a good place to start absolutely well folks whatever your money question we nerds are here to help leave us a voicemail or text us on the nerd hotline at 901-730-6373 that's 901-730-NERD or email us at podcast

16:26Elizabeth Ayoola:at nerdwallet.com all right let's get to this episode's money question segment that's up next stay with us