Many retirees who are living off pensions and their retirement savings are trying to eliminate unnecessary expenses to make their savings last as long as possible. Unfortunately, prescription drugs are one of the necessities that put a lot of pressure on a budget. In fact, The Financial Post reports that “prescription drugs make up the largest portion — 27.3% — of out-of-pocket spending for senior households.”
Learn more about how generic drugs can offer huge savings and reduce out-of-pocket expenses.
In 2006, Senator Herb Kohl from Wisconsin told the Special Committee on Aging that “prescription drug costs are a drain on seniors, families and businesses, all of whom are struggling to pay their health care bills. They need help, and we can respond by expanding access to generic drugs.” According to Kohl, generic drugs cost, on average, “63 percent less than their brand name counterparts.”
With many seniors taking an average of 10 – 14 prescription drugs a day, filling prescriptions with a generic instead of a brand name drug can make a huge difference in reducing out-of-pocket expenses and improving overall standard of living.
When it comes to health care spending, many governments are in crisis, and prescription drugs, which account for approximately “11 percent of national health care spending,” are unnecessarily adding to the financial burden, Senator Kohl reports. However, generic drugs could be the answer. “One study estimates that every 1-percent increase in generic use can save up to $4 billion. That means that a modest 5-percent increase in generic use could save as much as $20 billion,” Kohl says.
That’s why many health insurance providers will only pay for generic drugs, which means that if you get a brand name drug you may only be covered for the cost of the generic alternative, and may have to pay the difference out-of-pocket. It’s important to know exactly what your plan covers before you fill a prescription. If you’re not sure, ask your pharmacist to explain the coverage to you, or call your insurer directly for more information.
Generic drugs can cost “nearly a quarter of the price as their name brand counterpart,” Boomer & Echo reports, so asking for the generic is a simple and effective way to reduce your regular out-of-pocket expenses.
If you’re looking to save on costly prescriptions, the first step is to ask your doctor to prescribe generic drugs instead of the brand name alternative whenever possible. In some cases a generic drug does not exist, so keep in mind that it’s not always a possibility for your pharmacist to substitute your doctor’s prescription with a matching generic drug.
However, if your doctor knows that the cost of prescription drugs are a concern for you, then he or she may be able to prescribe an effective alternative that has a generic option (and if not, is at least more affordable). When it comes to prescriptions, cost should be one consideration, but not the only one. Ask your doctor if the generic alternative is:
The second step is to ensure your pharmacist knows that you’d like the generic alternative whenever possible. Ask them to keep a note on file, in case you forget to mention it when you get your prescription filled. Having a note on file is really helpful if you get a family member or friend to fill a prescription for you.
Another money saving alternative is to order your prescription drugs online. Online pharmacies often have lower dispensing fees and allow bulk orders, which can help you save as much as 50% on brand name drugs and 25% on generic drugs, not to mention the time and hassle of running to the pharmacy. Before you go this route you should check with your doctor to ensure:
Pharmacy checker is a great online resource that checks the safety credentials of online pharmacies. It also compares the cost of popular drugs, to help you find the most affordable, safe online option.
Occasionally you’ll run into a prescription drug that doesn’t have a generic alternative. If this is the case, check with the drug manufacturer to see if they offer any savings or discounts that will help make the drug more affordable. According to Ashley Cohen, Public Relations Group from inVentiv Health, some drugs, like Nuplazid (a Parkinson’s drug) “offer dedicated specialists who help patients (and families) work with their health insurance company to verify the prescription, determine if financial assistance is necessary and then deliver it to the patient’s home, monthly.” Many drug manufacturers have a dedicated area on their website that aims to help make their drugs more accessible to patients in need.
Senior Discounts compiles an annual prescription list, which is a good resource to find senior discounts on prescription drugs (but discounts vary by location, so read the fine print carefully). Their 2018 list recommends:
Ultimately, prescription drugs are a costly expense for most retirees, but also an area in the budget that offers potential savings. The simple switch to generic drugs could add up to big savings each year. So, what are you waiting for? Stretch your retirement dollars further by switching to the generic alternative and finding ways to reduce your prescription costs whenever possible.
How much do you spend on prescription drugs every year? Has switching to generic drugs helped you reduce your annual health expenses?