Saving Money by Using a Preferred Pharmacy

Finding cost savings by choosing the right pharmacy

Posted on: September 29, 2014
Express Scripts Medicare Advisor
Ms. Kyong specializes in personal finance issues for Medicare recipients. Topics include managing healthcare costs in retirement.

When you enroll in a Medicare Part D plan, the plan will offer a network of pharmacies where you can fill your prescriptions. Plans partner with many different types of pharmacies — independent community pharmacies, chain drug stores, grocery stores and major retailers — to offer enrollees choice and convenience when filling a prescription. The size of the pharmacy network varies by plan. Some plans have a network of 60,000 or more participating pharmacies nationwide, while others offer smaller networks of 30,000 or less.

There may be 2 two types of pharmacies in a Part D pharmacy network:

Preferred pharmacy: This term refers to a smaller number of pharmacies within a plan’s network that have agreed to charge a lower cost for your medication. When you use a preferred pharmacy, your cost-share, which is your copayment or coinsurance, will lower your medication costs.

Standard pharmacy: This term refers to the pharmacies that participate in your plan’s network that will charge a higher copayment or coinsurance than if you use a preferred pharmacy.

After meeting any deductible, your plan will cover the cost of your prescription, minus your copayment or coinsurance, at any standard pharmacy in the network. Your copayment is your “standard cost-share.” You can save even more money, however, by using a preferred pharmacy. The lower copayment or coinsurance you pay at these pharmacies is your “preferred cost-share.” Many times, the cost savings available from using a preferred pharmacy can exceed the cost of paying a slightly higher monthly premium. Using a preferred pharmacy also can help you delay reaching the Coverage Gap (donut hole) by keeping your overall prescription drug costs down.

Here are some things to consider when looking at pharmacy networks in a Part D plan:

  • Size: How many pharmacies are in the plan’s network? Does the network include preferred pharmacies? Does it include pharmacies that are located near you?
  • Choice: Does the preferred pharmacy network include chain outlets and independent community pharmacies? Does it also have a home delivery pharmacy option for you? You should not have to sacrifice options for cost savings.
  • Savings: Does the network offer true savings? What is the difference in copayments when you use a preferred pharmacy vs. a standard pharmacy? Will that difference help offset the cost of a higher monthly premium?

Before you fill a prescription, use your plan’s pharmacy locator to find a preferred option. If you travel frequently or have a second home, you may want to check into preferred pharmacies at that location, too. If your doctor sends your prescriptions directly to your pharmacy electronically, be sure to inform him or her of any changes in the pharmacy you wish to use.

Make Sure Your Pharmacy Is in the Network

When selecting a plan, look for one that makes it easy to find both standard and preferred pharmacies in that plan’s network through its website or a mobile application. If using a specific pharmacy is important to you, check with the plan before you enroll to make sure that pharmacy is in the plan’s network.