3 Reasons to Skip Insurance When Buying Your Prescriptions
How to pay out-of-pocket to save money on your medications
Have you ever left the pharmacy after picking up a prescription and wondered why you even had insurance? Well, guess what? It might be cheaper for you to skip insurance altogether when paying for your prescriptions.
In fact, recent research suggests that if you paid for your prescriptions with your insurance benefits, you might have overpaid.
The study defined an overpayment as any patient copayment that exceeded the average reimbursement paid by the insurer by more than $2. Among those claims, patients paid an average of $7.69 more than the reimbursement would have covered.
Here are three key reasons why you might want to ditch insurance at the pharmacy counter. Plus, tips for how to pay for prescriptions without insurance.
1. You may never reach your deductible
U.S. workers with employer-based health plans are struggling like never before to meet their deductibles, pay their premiums and fund their healthcare.
That’s according to a 2019 poll conducted by The Los Angeles Times and the Kaiser Family Foundation.
Premiums for employer-based plans increased 55 percent between 2008 and 2018. The average insurance deductible, meanwhile, rose by more than 250 percent.
Workers’ wages haven’t kept pace with that growth. As a result, 40 percent of workers reported they didn’t have enough in savings to cover their deductible.
Other key findings include:
- Nearly half of Americans with at least a $3,000 individual deductible or a $5,000 family deductible had problems affording their healthcare.
- A quarter said they or an immediate family member struggled with their medical bills before meeting their deductible.
- A third put off healthcare treatments in the last year.
If you’re struggling or unlikely to reach your deductible in a given year, it might make more sense to skip insurance altogether. Particularly at the pharmacy counter.
2. Skipping insurance can save money
Even if you don’t have an HDHP, paying cash for your prescriptions could still save you money, at least in the short term.
That’s because a copay doesn’t always cost less than if you paid for the medication outright, without insurance.
There are lots of factors at play, but one of the most common — and divisive — is the copay clawback phenomenon.
A “clawback” happens when a pharmacy charges you, the patient, more for your prescription than what your insurer pays for the medicine.
In other words, there’s a 23-percent chance that a portion of every prescription you buy goes to a third-party. That is, if you buy your medicine with health insurance benefits.
Here’s how that looks for you in practice.
You go to a pharmacy for a prescription. The pharmacist runs your prescription through the pharmacy’s system.
A third-party negotiator, often called a Pharmacy Benefit Manager, or PBM, tells the pharmacist your copay for this drug is $50. (The PBM and prescription manufacturer set this pre-negotiated price.)
You pay $50, even though the medicine only costs $40. That’s because this third party is taking back a part of that $50 copay, as decided by their contract with the pharmacy.
Now, if you pay cash in this scenario instead of using your insurance, you essentially cut out this third-party. The third-party loses its ability to upcharge at your expense. And you get a clearer price upfront.
Patients overpaid for nearly 25 percent of pharmacy prescriptions filled in 2013, with an average overpayment of $7.69.
3. It could mean better overall health
Some healthcare professionals worry that patients who are overpaying for healthcare, or who are worried financially about their healthcare, might cut corners.
This could mean putting off necessary treatments. It could mean extending the life of a medication by taking it less often or at lower doses. Or even leaving the pharmacy without their medicine altogether.
Of those who don’t know how much a prescription will cost when they arrive at the pharmacy, half will simply leave empty-handed. This can lead to disease relapses, complications or even hospitalizations.
But, if patients know their prescription costs upfront, they’re more likely to leave with their prescribed medication and lead healthier lives.
How to shop for prescriptions without insurance
Shopping for your prescriptions — whether you have insurance or not — is easier than you think. Many popular discount cards are “cash-only,” meaning you can only pay for their discounted prescriptions by paying out-of-pocket — or going without healthcare benefits, whether from private insurance or Medicaid or Medicare.
These discount cards typically only work for generic medications. But if you are having trouble affording a brand-name med — and want to stay on that drug — you might want to pursue other options.
Like ScriptHero, for instance. ScriptHero works for both generic and brand-name medications. And, depending on the medication, we’ll even work with you to find the best price — regardless of your healthcare coverage.
To get started, simply search for your prescription — brand or generic — at scripthero.com. We’ll guide you the rest of the way.
Compare prescription pricesLearn More
 “Overpaying for Prescription Drugs: The Copay Clawback Phenomenon,” University of Southern California Leonard D. Schaeffer Center for Health Policy & Economics, 2018
 “Health insurance deductibles soar, leaving Americans with unaffordable bills,” Los Angeles Times, 2019
 “2018 Real-Time Benefit Check National Adoption Scorecard Key Findings,” CoverMyMeds, 2018
This article was last updated March 03, 2020