High Deductible HSA: Understanding Prescription Costs

djvan

New Member
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Hello. I'm 25 years old, and currently on my parents insurance. This year they switched their plan to a high-deductible HSA that offers 0% coverage until $4,000, after which they pay 80% to $6,000, after which they cover 100%. This is for medical and prescriptions only - dental and eye are separate. I currently take a high-cost medication on a monthly basis, and I'm trying to decide the best route to take. Here are some questions I have:

1) Why is there a difference in price for my medication when paying cash vs. when billing my insurance? Generally the cash price is cheaper, but if I pay "cash" the amount won't go towards my deductible.

2)I'm aware of coupon codes that reduce the cash price by nearly half - is it possible to bill the coupon as the primary and insurance, and then bill my HSA the remaining price as a secondary insurance?

3) I'm not sure we'll ever meet our deductible, so paying cash might actually be a better option, if it ends up being cheaper. Is it possible to use the HSA account money (aka the credit card linked to the HSA account) to pay for a prescription that wasn't billed to the insurance?

Thanks for any help!
 
Hello. I'm 25 years old, and currently on my parents insurance. This year they switched their plan to a high-deductible HSA that offers 0% coverage until $4,000, after which they pay 80% to $6,000, after which they cover 100%. This is for medical and prescriptions only - dental and eye are separate. I currently take a high-cost medication on a monthly basis, and I'm trying to decide the best route to take. Here are some questions I have:

1) Why is there a difference in price for my medication when paying cash vs. when billing my insurance? Generally the cash price is cheaper, but if I pay "cash" the amount won't go towards my deductible.

2)I'm aware of coupon codes that reduce the cash price by nearly half - is it possible to bill the coupon as the primary and insurance, and then bill my HSA the remaining price as a secondary insurance?

3) I'm not sure we'll ever meet our deductible, so paying cash might actually be a better option, if it ends up being cheaper. Is it possible to use the HSA account money (aka the credit card linked to the HSA account) to pay for a prescription that wasn't billed to the insurance?

Thanks for any help!

Yes, you can use your HSA money regardless.
You may be able to submit those cash receipts to be put towards the deductible.
 
Hello DJVAN,
Pharmacies have contracts with insurance carriers that stipulate the retail price. This has little affect on consumers that have copays/coinsurance. However, you're paying the full retail cost and its applied to your deductible. Cash price discount is at the pharmacies discretion. This is similar to hotels, the stated hotel rate posted could be $300/night but most people are paying $150/night.
A few things to keep in mind. Many HSA plans have embedded deductibles & out of pockets - meaning your dad's, mom's and your expense all accumulate toward the deductible & OOP. So if you're paying cash but its not counting toward your ded/oop then you might be doing yourself a disservice in the long run.

If you take this routinely, then having a 90-day mail order refill arrangement might save some money.
 
Just a couple of thoughts..

And this totally depends on the medication you are taking and cost, but you might want to investigate:

1. Does the drug offer a discount program? Many "very" expensive meds offer this. Go to the manufacturers website and check.
2. I am assuming you are on your parents plan because they are paying the premium. It would be well worth the time to investigate if it would be cheaper for you to get your own plan, that offers prescription copays. You are a 25 year old male (single?) and if you are concerned with the drug cost, you probably aren't making a lot of money. It might make sense to go to a carrier and see what plans are available in your area. If your drug is going to cost you $300 month and you can get a decent plan at $150 month, with a $50 RX copay, you've saved $100. (You aren't eligible for a subsidy until age 26, so I wouldn't bother with healthcare.gov). It may not work, but its worth the 30 minutes to investigate.

Where are you located? You might be able to find an agent on the forum. Good luck!
 
Pharmacies have contracts with insurance carriers that stipulate the retail price. This has little affect on consumers that have copays/coinsurance. However, you're paying the full retail cost and its applied to your deductible.

I am going to give you one more time to rethink that response.
 
Yes, you can use your HSA money regardless. You may be able to submit those cash receipts to be put towards the deductible.

HSA money may only be used for dependents claimed on a tax return. A 25 year old may be a dependent for an ACA plan but not eligible for HSA distributions.
 
Good point, but he can open his own h.s.a and anyone can contribute up to ind max. But if no income than it doesn't matter as no tax advantage.
 
Hi Everyone.

Thank you for the informative replies. I'm going to give a little more information, in response to some posts:

1) The drug I take is Class II, and not eligible for 3 month supplies. No savings there.

2) I have a credit card in my name, linked to the HSA account. My parents and two siblings also utilize the same HSA, and contribute toward the same deductible. However, only one other person regularly utilizes the pharmacy, and has a low cost prescription, around $14 a month.

3) Routine doctors visits (yearly physicals) are included with our insurance plan. My doctor writes me three prescriptions at a time, meaning I need to schedule four appointments with him per year to get my medication. One of those will be a yearly physical which would be covered, so three appointments will be paid "cash", and contribute toward the deductible.

With the information you guys have provided, I think the best route for me would be to try to utilize the "coupon" code, which cuts my prescription cost from $260 to $130. I could then use the HSA account money, and forward my receipts to my health insurance company, and hopefully they will count the money towards the deductible...

Sound about right?
 
forward my receipts to my health insurance company, and hopefully they will count the money towards the deductible...

Maybe.

I don't know if carriers process paper bills any more. If it isn't filed electronically by the provider I'm not sure what happens to it. My guess is nothing.
 
...2) I have a credit card in my name, linked to the HSA account. My parents and two siblings also utilize the same HSA, and contribute toward the same deductible... Sound about right?

You and your siblings may only use your parents HSA account if they claim you as dependents on their tax return. At 25 that is unlikely for you. As mentioned here, you could open up your own HSA, though the tax benefits of that aren't likely as good as if you were legally allowed to use the debit card attached to your parents account.
 
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