Understanding Out-of-Pocket Costs and How Inside Rx Can Help

In the context of medical care, out-of-pocket costs are the amount you have to pay for a healthcare-related service or product that your insurance doesn’t cover. Simply put, you pay for out-of-pocket costs on your own, without the help of your carrier.

For instance, if you have limited or no prescription drug coverage, you would have to pay out-of-pocket for your medications. Having to pay, using your own funds, for your prescribed medication can be a tremendous financial burden. This article delves deeper into out-of-pocket medication costs and how Inside Rx discount cards can help with this aspect of non-covered medical expenses.

What Are Out-of-Pocket Costs in Health Insurance?

The term “out-of-pocket costs” pops up frequently when you search for more information about public or private health insurance plans. As mentioned previously, these are expenses you have to pay for on your own, without assistance from your insurer.

Since health insurance plans and coverage differ depending on the provider, type of plan, and the person being insured, what is covered and what falls under “out-of-pocket” often varies.

Examples of Out-of-Pocket Costs

Common out-of-pocket costs in health care include:

Insurance Premiums

This is the amount an individual pays monthly, quarterly, or yearly to gain access to medical products and services under a health insurance policy. You must pay premiums in order to keep your coverage. Not paying them regularly or on time could result in you losing your healthcare benefits.

Deductibles

This is the amount you pay out of pocket for a medical service or product before your insurance starts paying for the rest. Say, for instance, you have prescription drug coverage through Medicare Part D, and the deductible is $400. This means you’ll have to pay for your out-of-pocket medication costs until you reach the deductible of $400. Only then will Medicare start paying for your medication.

Coinsurance

This is the amount, typically a fixed percentage, that you pay for a covered medical service after you reach your plan’s deductible. It is a cost-sharing feature in many health insurance plans. Typically, the amount the insurer pays is higher than that paid by the insured. A common breakdown in insurance policies is 80/20, meaning the insurer pays 80% of costs while the insured pays 20%.

Copayment

Like coinsurance, this is a cost-sharing feature of many insurance policies. However, unlike coinsurance, copayments are not a percentage but a flat fee that you pay for a covered health service once you’ve met your deductible.

For example, your medication costs $100, and your health insurance policy states you have to pay $10 for every prescription refill. You pay $10 while your insurer covers the rest. Copayments count toward your deductible.

Non-covered Services

These are medical services that your health insurance does not pay for or reimburse you for. Examples of common non-covered services are elective procedures and medications prescribed for off-label use.

Prescription Drugs

People who do not have health insurance have to pay for out-of-pocket medication costs. This means they have to pay for their prescription medication using their own funds at retail price. Meanwhile, those with health insurance have the option to purchase medication at pre-negotiated prices from pharmacies approved by the insurer.

The out-of-pocket medication expenses for insured individuals depend on their policies and their deductible requirements. For instance, some insurance providers require policyholders to meet their deductible before covering prescription medication. Meanwhile, others allow policyholders to buy medications at pre-negotiated prices even without meeting the deductible.

Example: Your health insurance plan includes prescription drug coverage. It has a $3000 deductible for both medical services and prescription medication combined. If you’ve already paid $2500 in medical services and need to pay $500 for your prescription, your out-of-pocket medication costs amount to $500. However, your deductible will be met. This means your policy will cover the costs of some or all of the rest of your prescription fills for the year.

However, the above scenario doesn’t necessarily mean you won’t have to pay anything for your prescription medication. If you’re on a copay plan, you’ll need to keep paying your copay each time you get your prescription filled.

Understanding Out-of-Pocket Maximums

The U.S. government has set limits on how much an insured person or family pays out-of-pocket for health care services. For the 2023 calendar year, the limit is $9,100 for an individual and $18,200 for a family. However, depending on your provider, the out-of-pocket maximum may be lower or higher than these numbers.

If you have no insurance, there is no cap on your out-of-pocket expenses for health care and medication.

How the Inside Rx Card Can Help With Out-of-Pocket Medication Costs

Inside Rx is a prescription discount card designed for individuals and families who pay out-of-pocket for their medications. While anyone can use Inside Rx, it is especially helpful for those who:

• Have no insurance
• Are underinsured
• Have high-deductible insurance plans

Keep in mind that if you go outside your benefit, any purchases made using the Inside Rx card will not count toward your deductible. However, if your deductible or copay is very high, using the Inside Rx card may be a more cost-effective option.

Inside Rx is available at no cost and can be used to save up to 80% off the retail price of medications, both name-brand and generic. Unlike copay cards and prescription assistance programs (PAPs), there are no need-based eligibility requirements or lengthy application processes. You can start saving on your prescription medication as soon as you download the Inside Rx card from our website.

How Inside Rx Works

Inside Rx negotiates with drug manufacturers to get the best possible prices on many kinds of medication. We then pass the savings on to Inside Rx card users by giving them access to these negotiated prices at nearly 60,000 participating pharmacies in the U.S. and Puerto Rico.

To get started, visit the Inside Rx website and download your Inside Rx card today.

Sources:

• https://www.uspharmacist.com/article/a-pharmacists-primer-on-prescription-discount-cards
• https://www.healthinsurance.org/glossary/out-of-pocket-costs/