Discount Rx versus PDPs

Oct 20, 2007

  1. retread
    Offline

    retread Guru

    Posts:
    1,932
    Likes Received:
    7
    State:
    Kansas
    Wal-Mart started this discount drug competition that has heated up. Now every big chain pharmacy in the country has been matching or trying to beat their prices. The going rate for generics is $4/mo supply. Most PDPs are higher, usually about $7/mo. It doesn't take a rocket scientist to see the cost savings FOR THAT PARTICULAR DRUG, and gives rise to the question "Why bother with a PDP?":err:

    Three reasons: 1) When additional drugs are needed, not prescribed at the moment. 2) A late penalty of 1%/mo FOR LIFE when a PDP is now really needed. 3) The discount program may come to an end.:yes:

    I interview my prospects to see how many drugs they take. If they only take 1 generic, I advise them to enroll in the cheapest PDP available. It usually comes with an annual deductible, which that client will never come close to reaching. Furthermore, I tell them they might as well buy the $4 drug using cash and not present their PDP card, because the use of their card will tally towards the initial coverage limit, which is to their disadvantage, should a health crisis occur. This way, they save money and avoid paying the late enrollment penalty for not having a PDP at the same time. The PDP stands ready to help in a time of unexpected crisis... as a fall-back plan.:GEEK:

    Now I hear that the discount drug competition may drastically change for next year. Some pharmacy chains have been told their present company policy of matching competitor's pricing will end this year, and no info on what next year will bring. It seems that many drugs have been sold as loss-leaders, and with the economy sagging, belts need to be tightened. The problem is therefore: What if the patient is led to think he will continue to get his Rx at $4, only to find out come January that this is no longer available, and misses the window to enroll in a PDP?:mad:
     
    retread, Oct 20, 2007
    #1
  2. honestagent
    Offline

    honestagent Guru

    Posts:
    477
    Likes Received:
    1
    I have encountered the same mind set and your rebuttals are great, thorough, and plan for the unexpected and most seniors who are not dual will comprehend the 'no guarantee' concept and change b/c throughout their lives, they have experienced these 2 notions thus far.

    I've told my clients to ride the wave of zero because we don't know how long zero will be... and surely, no more zero premium in those counties that were once zero. (again in my favor.. and theirs too for good planning).. so GREAT POST HERE. Tx.
     
  3. wilkin
    Offline

    wilkin Guru

    Posts:
    261
    Likes Received:
    1
    Two years ago when Part D came out I sold hundreds of Humana's Standard Plan at 10.40 per month here in PA to folks who were taking no meds and wanted protection against the penalty. Last year the premium went up to 14.80 and while it was a hefty increase for those simply buying protection against the penalty, most stayed with it, and I sold lots more to new clients.

    Now in 2008 Humana has nearly doubled the cost of the Standard Plan to 26 per month! I think it is outrageous and so do my clients - my phone is ringing with "isn't there another low cost plan"?

    Well turns out there is from First Health. They have a 14 dollar plan, but guess what? They don't pay agents!!! So do I recommend this to my clients or convince them to pay more so I can earn a commission?

    What would you do?
     
    wilkin, Oct 21, 2007
    #3
  4. honestagent
    Offline

    honestagent Guru

    Posts:
    477
    Likes Received:
    1

    Do the right thing... it will come back....
     
  5. retread
    Offline

    retread Guru

    Posts:
    1,932
    Likes Received:
    7
    State:
    Kansas
    I agree... Give them the name of the company providing the lowest cost coverage, and they will respect you for that. They may or may not return the favor, but you can take comfort in knowing you did the right thing for your client. You are not talking about a huge commission, anyway. Just write it off to good will. Describe to them your plan to meet their needs and let them consider that. I recently got a client from just such a prospect I spoke with earlier this year. They let me know right away that their friend was impressed that I didn't try to sell them something but told them to keep what they had. This is the way to build a good business. Sometimes you win by losing.:)

    BTW, First Health is a subsidiary of Coventry. You are correct that they don't pay agents, that is why it is as cheap as it is. Blue Cross/Blue Shield does this with Med Sups here in my neck of the woods. No agents, cheap policy, and they cover the land like cow manure. I still sell my services, and let the chips fall where they may! (pun intended)!:laugh:
     
    retread, Oct 21, 2007
    #5
Loading...