We often get questions from clients as to whether they should use their Medicare drug plan to pay for a prescription drug or, as an alternative, use a prescription drug discount program like GoodRx. It is true that sometimes in the crazy world of drug pricing, the GoodRx plan will provide a lower copay. So, you would think, in a simple world, you should just ask the druggist to run your prescription through their computer both ways and then use whichever plan results in the lowest copay that day.
Unfortunately, the correct decision is much more complicated. The reason is that all 2025 Medicare drug plans, whether they be through a Medicare Advantage Plan or as a separate standalone plan (for those people on Medigap supplements), have a maximum annual total copay limit of $2000. If you pay for an expensive drug through a discount plan like GoodRx, your GoodRx copay does not count toward the $2000 annual out-of-pocket limit.
Let’s take an extreme example. In January, you go to your pharmacy to pick up your very expensive speciality drug (what your drug plan would call a Tier 5 prescription) and the druggist tells you it will cost $500 through your drug plan but only $300 if you use GoodRx. Commonsense would say that Good Rx will save you $200 for January and $2400 for the calendar year. However, if the expensive drug is on your Medicare plan’s formulary, your total out-of-pocket for all your 2025 drugs is limited to $2000, whereas using GoodRx would result in a $3600 2025 out-of-pocket (plus the copays on all of your other prescriptions).
Here is the rule of thumb we suggest you should use:
- If all your prescriptions have no or low copays and you can save a few dollars by using GoodRx, it probably won’t hurt to do so.
- If you have one or more expensive drugs, using your drug plan rather than GoodRx will sometimes be a better decision even though you might pay higher copays early in the year. (Again, you want to make sure your drug is on your Medicare plan’s formulary.)
Healthcare should not be so complicated!!!