Understanding how your health insurance plan works can be tricky, even for insurance industry experts.In a study conducted by the American Institutes for Research, three out of four people felt confident they understood how their health insurance worked, but when asked to calculate out­-of­-pocket expenses in a real­-life situation, only one out of five people got the math right. Phrases, terms and definitions might make common sense on the surface, but the details trip many people up.

If you take prescription drugs, you understand costs are continually on the rise. Americans, on average, fill more than 12 prescriptions every year, totaling $300 billion annually. And costs are expected to go up 6.3% by 2024. Is there any solution to keep prescription drug costs affordable? There is, if you understand how your health insurance policy works, and do some creative sleuthing on your own to find the best price.

Understand Prescription Drug Deductible

On the federal marketplace, 64% of health insurance plans have a medical deductible, while 36% have both a medical deductible and a prescription drug deductible. With one medical deductible to cover both care and drugs, the average health consumer pays $4,122 out of their own pocket before the deductible is met. With two separate deductibles, the average prescription deductible is just $208. If you take several medications, you recognize the immediate savings having a health plan with two deductibles. Insurance coverage that includes a drug deductible might cost a bit more each month, but the overall savings can be substantial, depending on the types of prescriptions you take.

Call Several Pharmacies

Many consumers pick up their prescription drugs where it is most convenient. However, prescription drug pricing can vary greatly based on where you purchase your drugs. Let’s take a look at an everyday example to see where you can save on prescription costs.*

Drug: 90­-day supply of Metoprolol Succinate 50MG, which is a beta blocker, used to lower blood pressure and regulate the heart.

Pricing through preferred insurance provider:
$95.96 cash
$71.34 with insurance

Target Pharmacy cash price:
$120.86 generic
$151.46 name brand

In this case, using a preferred pharmacy your health insurance company recommends is the best price option.

Try a Bulk Retailer

Both Costco and Sam’s Club have pharmacies that anyone off the street can buy medications from without a club membership. Sam’s Club does dangle lower prices with a Plus Membership, but Costco’s pricing is available to everyone, membership or not. Using the 90­day supply of Metoprolol Succinate as our test case, the cash price at Costco came in as the lowest rate.

Sam’s Club
$74.32 cash price
$30 flat rate with PLUS membership

Costco
$38.43 cash price, no membership is required

Mail Order

Your health insurance plan might offer mail order pharmacy benefits. There can typically be a two week wait or longer to get your prescription drugs, so you need to be organized to participate in mail order. But the cost savings can be worth the wait. Our 90-­day supply of Metoprolol Succinate only costs $34.65 through the insurance company mail order program.

Take some time to learn how your health insurance plan works, and how you can get the best pricing on prescription drugs in your local area.

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*Pricing estimates as of February 2016.