When Paying Cash is Cheaper than Using Health Insurance
Posted on behalf of Rizk Law on Nov 12, 2016 in Medical Issues
A yearly investigation by Minneapolis station KARE11, followed by two recently filed class-action lawsuits, found that pharmacists must sign so-called “gag” clauses preventing them from disclosing lower prices than what patients with insurance were paying for medications. In most cases, an insurance co-pay for a medication was twice as expensive as for just paying cash for the same medicine.
Why Co-Pay More Expensive than Paying Cash?
Pharmacy Benefit Managers (PBMs), which serve as the middleman, set the price you pay the pharmacy for medications. In many cases, the price they set for your co-pay is twice the cash price. “Gag clauses” in the contracts pharmacists sign with PBMs prevent them from telling you this.
What Happens to the Extra Amount You Pay?
Instead of going to the pharmacy, as much as 80 percent of your more expensive co-pay is pocketed by Pharmacy Benefit Managers and insurance companies. UnitedHealth Group, which gets much of its revenue from its Pharmacy Benefit Management division, frequently uses the so-called “clawback tactic” to reap profits from sales of pharmaceuticals.
UnitedHealth Group Named in Two Class-Action Suits
In October 2016, two class-action lawsuits were filed accusing UnitedHealth Group of a “scheme to defraud” customers in connection with prescription copay pricing.
The lawsuits claim that UnitedHealth Group and its related companies used “gag clauses” to try to keep its so-called “clawback scheme” secret.
You Can Shop for Lowest Prices on Medicine
There is one drawback to paying cash for your prescriptions. The money you pay does not apply toward your deductible. If you want to pay cash, consumer advocates recommend shopping around. To search for the least expensive price for your prescriptions see Consumer Reports article with tips about finding the best prescription drug prices. You can also check prescription drug prices and find discount coupons at pharmacies in your area through GoodRX.com and Lowestmed.com.