Can I use drug discount programs like GoodRx with my Medicare Part D prescription drug benefits?
GoodRx is just one of a growing number of drug discount coupon programs out there advertising savings on prescription drugs. There are several companies out there spending enormous amounts of advertising money, touting their programs as a way help people save at the pharmacy counter. You mentioned one of them, GoodRx – but WeRx, Blink Health, and Optum Perks are just a few examples of others.
Many of these companies have slick apps you can load on to your phones and even access “premium” discount services for a monthly subscription fee, like GoodRx Gold.
These prescription discount cards and apps often look, walk, talk and smell like “real” insurance. They’re not. That’s all these prescription drug discount plans are: discount cards. They’re not honest-to-gosh insurance. Unfortunately, I’ve run into quite a number of Medicare insurance agents who actually recommend their clients use these discount cards. I’ve even heard people say their pharmacists try to use these discount cards instead of the Medicare Part D benefits at the counter. I think that’s a disservice, and I’ll explain why below.
How Do Prescription Discount Cards Like GoodRx Work?
Drug discount programs like GoodRx help people save money at the pharmacy counter by negotiating deals with Pharmacy Benefit Management companies (PBMs) who in turn, have negotiated drug discounts and rebates with drug manufacturers. They inject themselves in the “middlemen” category in-between the PBMs and the consumer.
Pharmacy Benefit Managers are companies that normally function as “middlemen” negotiating prices and discounts between drug manufacturers and insurance companies. What GoodRx and other discount prescription drug companies do is act as “middlemen to the middlemen” and pass on those PBM discounts to the consumer, instead of the insurance companies.
GoodRx then passes those rebates they get from the PBMs on to the consumer and gets paid a fee (or commission) from the PBM. That’s how they make the bulk of their money.
Medicare and Prescription Drug Discount Cards
Look, anything that enables people to spend less on prescriptions is a good thing. Unfortunately, you cannot use a discount program and Medicare insurance at the same time. The discount programs don’t work with Medicare Part D Prescription Drug Plans, or Part D plans embedded within a Medicare Advantage plan (MAPD). By “don’t work” I mean they don’t coordinate with insurance companies; they don’t “talk” to each other. Again, that’s because prescription discount cards are not “real” insurance. “Real” insurance can coordinate discounts, annual spending, track claims and track health conditions, identify potentially harmful prescription drug interactions, and a thousand more items.
I found a GoodRx Investor’s Day presentation reporting 34% of all of their customers are people on Medicare. That means there are potentially millions of people on Medicare who are getting prescription drugs with a coupon, and their Medicare insurance company likely doesn’t know about it.
That’s because using a discount card at the pharmacy counter instead of your insurance benefits, is basically the same thing as using a coupon at the grocery store. You’re getting a discount off the retail price, but there’s no insurance claim being processed. The Medicare insurance company won’t know you got a prescription from the pharmacy, and that’s where the real problem lies.
Does GoodRx Work With Medicare?
No. Using a Prescription Discount Card instead of your Medicare Part D benefits—either through a Medicare Part D Prescription Drug Plan or a Medicare Advantage plan—means the prescription costs won’t count towards the four phases of Medicare Part D. In other words, they won’t count against your annual spend and thus, won’t move you through the four phases of Medicare Part D.
If you use a discount card, the Medicare Part D insurance company can’t track your prescription drug costs and spending through the four phases because they don’t know you’re purchasing prescriptions using a discount card.
Essentially, if you’re using a discount program and not your Part D Medicare benefits, what you’re doing is paying cash (with the discount) for that prescription, and the Medicare insurance company doesn’t know you’re filling a prescription. This is potentially problematic because if the Medicare insurance company can’t track your prescription drug spending, or potential harmful prescription drug interactions. Whatever prescription you buy with a discount card won’t apply to your Medicare deductibles and coinsurance. Once you do use your Part D benefits, none of the prescriptions bought with the discount card or program will have applied to your Medicare Part D coverage. That means, when you eventually do use your Medicare Part D benefits for a prescription, you won’t have received any financial “credit” for the prescriptions you purchased through the discount program.
Thus, I’d recommend not using a discount card to pay for your medications if you’re on Medicare.
Janice, I hope that helped you!
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To your wealth, wisdom, and wellness!
Author Bio: Matt Feret is the author of the Prepare for Medicare book series and launched prepareformedicare.com to help people get objective answers to questions about Medicare. He’s held leadership roles at numerous Fortune 500 Medicare health insurers in sales, marketing, operations, product development and strategy for over 20 years. Matt holds a BA from Virginia Tech and an MHA from Washington University in St. Louis.