How to Cut Your Prescription-Drug Costs
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Here's your Money Briefing for Monday, January 8th. I'm J.R. Whelan for The Wall Street Journal. Whether you have a prescription drug plan with a deductible that reset on January 1st or have no health insurance at all, the cost of prescription drugs could take a big bite out of your bank account.
The prices can really vary, and there can be big differences, sometimes on the order of 50%. And so you could have a generic cholesterol drug cost something like $20 per prescription at one pharmacy, and then across town it might only cost $10 or $11.
We'll talk to Wall Street Journal reporter Peter Loftus about ways to cut your prescription drug costs after the break.
Americans who shell out big bucks for prescription drugs can take steps to rein in their out-of-pocket costs. Wall Street Journal reporter Peter Loftus joins me. So Peter, how did the math change for a lot of people as of January 1st?
How can new deductibles starting January 1 affect your out-of-pocket drug costs?
At the beginning of the year, when people have health insurance plans, a lot of them now have deductibles. And so this is a period of time where They have to spend a certain amount of money before more favorable insurance coverage kicks in. Now, sometimes that doesn't always apply to prescription drugs, but sometimes it does. And so what that means is that at the start of the year, if you have a high deductible plan, you may be on the hook for paying either the full price or a big chunk of the full price for a prescription drug until you get to the point threshold of spending where your insurance plan starts to cover more of that.
And how will changes in the law this year benefit people who do pay for prescription drugs?
One of the biggest changes in the law applies to Medicare. So that's mostly people 65 and older who have these Part D plans, drug benefit plans. In the past, there was really no limit on how much they might have to pay out of pocket for an expensive medication. And so this could add up into thousands and thousands of dollars. But starting this year, there's an effective cap on the out-of-pocket costs that people have in Medicare Part D. And this year, it's about $3,300. So it's still a lot of money. But if you're taking really expensive medication, this is going to save you money by limiting it at that.
How are prices for insulin affected?
The same law that enabled that, it's the Inflation Reduction Act, which was passed in 2022. It also had a provision that went into effect last year, so about a year ago at this time, that capped the out-of-pocket costs for insulin at $35 a month. And again, that's specifically for people in Medicare Part D. And then separate from that, the manufacturers of insulin, after many years of raising the list price for those products, last year, the big three manufacturers, they all announced significant price cuts. for insulin on the order of 70% reduction. And in addition to that, they also offer programs for people with insurance outside of Medicare to limit their out-of-pocket costs to $35 a month. And actually, that applies to people who have insurance or who don't have insurance.
Now, for people looking for prescription drugs, will they find that drugs are pretty much the same price across the board, or does it pay to shop around?
For certain drugs, it does pay to shop around. The prices can really vary depending on the pharmacy that you get it at. And so if you go onto a website called GoodRx, which offers savings programs and just information about where to find the best deal, you can type in the name of a drug you're taking. where you live, and it will show you a list of the different pharmacies in your area and how much the drug costs there. And there can be big differences, sometimes on the order of 50%. And so you could have a generic cholesterol drug cost something like $20 per prescription at one pharmacy, and then across town it might only cost $10 or $11.
And what about generic versions of big-name brands? Those can be cheaper, right?
Yes. And that's a good starting point as far as ways for people to think of savings.
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