Discount Drug Cards: What Every Senior Should Know

How Do Drug Cards Work When Filling A Prescription

When a consumer makes a purchase at the pharmacy, they present their discount prescription drug card and are provided with a quote for the amount of savings they can generate by using the card for the purchase. Once they have this information, the consumer can then make the decision of whether or not they want to make the purchase and / or use the card to do so. Savings are realized at the point of sale, not later through a rebate process.

For Whom Are They Appropriate

Nearly everyone can receive some benefit from a discount drug card. Persons without insurance can gain large discounts. Persons with insurance can avoid high deductibles and get discounts on medications that are not covered by their insurance. Even persons with very good insurance can benefit as drug cards also discount over-the-counter and pet medications (with a valid prescription).

How Much Can Be Saved Using A Discount Drug Card

This depends on many factors, the most important of which are the specific drugs being purchased and the issuer of the discount drug card. In the best of situations, as much as 85% off the retail price can be discounted. Accurate data is difficult to obtain. However, informal studies have found an average discount of between 15% and 20% when using a discount drug card. Generics drugs, in addition to already being less expensive, tend to be discounted at a higher rate than their brand name equivalents.

Determining Savings In Advance of Using The Card

Can the savings be determined in advance of using the drug discount card?  Yes and no.  The discounted rates are constantly changing due to many different factors.  It is nearly impossible to determine the exact discount for a specific card for a specific drug at a specific pharmacy.  However, one can present their card when making a purchase, receive a quote, and then elect to use or not use the card, or even to not make the purchase.  One can also call their local pharmacy and ask for a quote using the card. In addition, there is a drug savings card, GoodRx, that has a mobile app that allows one to find the most affordable price of the sought after medication in their area.

How Drug Cards Make Money

There are three ways by which organizations offering discount drug cards make money. However, not all card issuers engage in all three ways of making money, and not all ways of making money necessarily come at the cardholder’s expense.

1) Enrollment, Annual, or Monthly Fees – these are charged to the consumer directly and can range from a few dollars to as much as $100 / year. Not all cards charge these fees, and it is best to avoid those that do.

2) Transaction Fees – each time the card is used, a small fee is added to the final purchase price. While these fees come at the consumer’s expense, they are usually very minor and insignificant relative to the savings the discount drug cards generate. All discount drug cards have some sort of transaction fee.

3) Information Sales – information about drug purchases and locations are collected when the card is used and the information is sold to marketers. There are two types of information sales: personal and aggregate.

Personal information includes the cardholder’s purchase history, name, and address. If the individual purchases a diabetes medication, that information will be sold, and it is very likely he / she will receive direct mail advertising for diabetes supplies in the future. Aggregate information is not personally identifiable. An example of this might be 30% of all people who bought diabetes medication also purchased dietary fiber supplements. All discount drug cards sell information in aggregate, but not all cards sell personally identifiable information.

Drug Cards Interaction With Insurance

Drug discount cards work independently of one’s insurance. One either chooses to use their insurance card or their discount drug card. Both cards can be presented at the time of purchase and the consumer can choose to use whichever card provides the greater discount. Drug cards cannot be used in combination with insurance to lower the co-payments.

However, there are also co-payment assistance cards for persons who have insurance. These cards tend to be for more rare conditions for which the cost of medication is extraordinarily high. One can search for co-payment assistance cards by the name of the condition.

Why Use a Card When You Have Insurance

There are several reasons why persons with insurance might choose to use a discount drug card instead of their insurance.  

1) Deductibles – If your insurance has an annual deductible, you might use a discount drug card to receive discounts before you reach that limit.  

2) Spending Caps – If your insurance limits their maximum spending on prescriptions, you might use a card after that limit has been reached.

3) Better Rates – With some insurance and some medications, persons may find their out-of-pockets costs with a drug card are actually lower than their co-payments would be if they used their insurance.

4) Medicare Donut Hole –

When you fall into the Medicare Part D coverage gap, known as the Donut Hole. Please note that in 2019, this coverage gap has closed for brand name drugs and will close in 2020 for generic drugs. Learn more here.  

Drug Cards and Medicare Part D

Can one benefit from a discount drug card if they have Medicare Part D?  Yes, there are drugs that are not covered by Medicare Part D.  In addition, seniors who fall into the Medicare Donut Hole coverage gap can gain significant savings by using a discount drug card.

Which Pharmacies Accept Cards

Nearly all pharmacies accept most discount drug cards.  The exception to this rule is when a drug card is issued by a competing pharmacy chain.  For example, Walgreens might not accept cards issued by Rite-Aid or CVS.  To avoid this situation it is best to select a card that is issued independent of a specific pharmacy.

What Types Of Drugs Are Covered By Discount Cards

This depends on the specific drug card. However, most cards cover a very high percentage of prescription drugs, including brand name drugs, generics, and even over-the-counter medications and pet medications.

How To Choose the Best Discount Drug Card

It is important to recognize that there are many cards available, both good and bad.  Our organization recommends the following criteria for choosing a discount drug card.  

1) First and foremost, do not pay for the card.  There are many cards that are issued free of charge and provide the same or better discounts than the cards that charge annual or enrollment fees.

2) Do not provide personal information to obtain the card. Cards that collect your personal information, for the most part, intend to sell that information to marketers.

3) Check to see that your preferred pharmacies accept the cards.