Saving Money by Using a Preferred Pharmacy

Finding cost savings by choosing the right pharmacy

Updated on: March 1, 2019

Originally 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.

Medicare Part D plans offer a network of pharmacies where you will fill your prescriptions. Each plan provider partners with different types of pharmacies to offer enrollees choice and convenience when filling a prescription. These may include independent community pharmacies, chain drug stores, grocery stores and major retailers. The size of the pharmacy network will vary by plan. While some plans may offer a network of 60,000 or more participating pharmacies nationwide, others may offer a smaller network of 30,000 or less.

A Part D pharmacy network may offer two types of pharmacies:

  1. Preferred pharmacy: 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 copayment – also referred to as copay or coinsurance — may be lower, reducing the out-of-pocket cost of your medication.
  2. Standard pharmacy: Refers to the pharmacies that participate in your plan’s network but that are not “preferred,” and therefore may charge a higher copayment or co-insurance for filling your prescription.

After meeting the deductible amount, your plan will cover the cost of your prescription, minus your copayment, at any standard pharmacy in the network. Your copayment is your “standard cost-share.” You may save even more, however, by using a preferred pharmacy. The copayment at these pharmacies is your “preferred cost-share.” Many times, the cost savings available from using a preferred pharmacy may exceed the cost of choosing a Part D plan with a slightly higher monthly premium.

Here are some things to consider when comparing pharmacy networks in Part D plans:

  • Size: How many pharmacies are in the plan’s network? Does the network include preferred pharmacies? Are the pharmacies located near you?
  • Choice: Does the preferred pharmacy network include nationwide chains 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 for your current medications? 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 pharmacy near you. 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, mobile application or Customer Service. 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.

Don’t Miss Out on the Savings That Home Delivery Offers

Home delivery of prescription medications can help people who manage chronic conditions such as hypertension, high cholesterol or diabetes to save money, avoid trips to the pharmacy and improve their health. Using home delivery may save you in out-of-pocket expenses when compared to the cost of filling prescriptions at retail.

 With the convenience of having your medications shipped to your home, home delivery can help you better adhere to treatment plan. According to studies, taking your medications as prescribed by your doctor is one of the most important things you can do to manage chronic conditions and improve health outcomes.

Want to learn more about using a Medicare Part D preferred pharmacy network where you live or travel to save money on the prescription drugs you take regularly? Watch this video.