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Surprise: Pay less for medicine by not using health insurance

You might be paying more for your prescriptions at the pharmacy if you use your health insurance than if you pay cash out of pocket.

How can that be?

Say your doctor prescribes a generic drug and, using your health plan, your copay for generics is $10 per 30-day supply. If you submit your purchase through your insurance, you will pay the $10. But many discount stores, pharmacy chains and supermarkets have deals for common generics that could cost less. Stores including Wal-Mart, Costco, K-mart and Target have programs that offer about 150 to 300 generic drugs at the discounted price of $4 per 30-day supply.

The retailers do this as a marketing ploy, explains Charles Coonrod, principal of Foundation Strategies in Katy, Texas. "They get you to come in for the drugs and expect you'll buy other things while you're there."

Thus, your generic-drug copays through your health plan can be higher than the price of the drug. Health plans often set an average price to cover the cost of most drugs in the tier, which means that some drugs could be sold for less.

Ultimately it depends on the drugs, your health insurance plan, and where you buy it, says Dr. David Belk, who has an internal medicine practice in the San Francisco Bay Area and maintains the website True Cost of Healthcare.

Generic drugs for common conditions

The generic drugs in many retailers' discount programs are prescribed for the most common chronic conditions including arthritis, heart disease, hypertension, diabetes and depression, Belk says. (The drug-discount programs aren't necessarily nationwide because some states have laws prohibiting retailers from pricing drugs below cost.)

If you're taking four pills a day, as many people do as they age, according to the AARP, you can save $6 per prescription. That's $72 a year per medication or $328 for four. You could save more if your copay is higher for generics, and some are.

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