Mature woman looking at prescription bottle

Prescription deductibles aren’t too complicated. In fact, deductibles can be one of the easiest parts of a plan to compare. They can be seen at a glance, and there aren’t many factors to consider. But you should know the differences between plans before you decide in order to avoid surprises at the pharmacy or in your bank account.

Deductible Overview

Before going into detail about the different types of prescription deductibles, it’s important to exactly define what a deductible is. A deductible is a form of cost-sharing. Before your health insurance plan will begin to pay for covered services and products, if your plan has a deductible, you must first pay a predetermined amount out of pocket. The total amount of your deductible (and whether it is combined for medical and prescription) will vary by plan.

Combined Prescription Deductible

If you have a combined prescription deductible, your medical and prescription costs will count toward 1 total deductible. Usually, once this single deductible is met, your prescriptions will be covered at your plan’s designated amount. This doesn’t mean your prescriptions will be free, though. You may still have to pay some form of cost-sharing, even after a deductible is met.

Example

Joe’s health plan has a combined deductible of $3,000. He has purchased $250 in prescriptions and spent $2,750 on a minor surgery covered by his plan, which he paid for out of pocket. Joe’s deductible has been met for any medical or prescription purchase he makes in this plan year. He will only have to pay $10 for each refill of the regular, generic prescription he takes.

On the Marketplace

If you are shopping on the Marketplace, combined medical and prescription drug deductibles can be found in most bronze and silver plans. In 2016, 89 percent of bronze plans and 56 percent of silver plans offered combined deductibles. For the same year, the following metal tiers’ combined deductibles averaged:

  • Bronze: $5,765
  • Silver: $3,064
  • Gold: $1,247
  • Platinum: $21

Separate Prescription Deductible

If you have a separate prescription deductible, only prescription costs will count. No other covered medical costs (such as visiting the doctor’s office) will count toward your prescription deductible. While this may seem like a negative aspect, separate prescription deductibles are much lower than combined deductibles that cover both medical and prescriptions, so they are easier to meet.

Example

Joe’s health plan has a separate prescription deductible of $250. While he has already spent $2,750 on a minor surgery covered by his plan, none of this cost counts toward his prescription deductible. He must still pay $250 on prescriptions in order to meet his deductible. Once he has met his deductible, he will only have to pay $10 for each refill of the regular, generic prescription he takes.

On the Marketplace

If you are shopping on the Marketplace, most gold- and platinum-tier plans will offer separate deductibles. In 2016, 57 percent of gold plans and 73 percent of platinum plans offered separate deductibles. That year, the average separate deductible for each metal tier was:

  • Bronze: $404
  • Silver: $280
  • Gold: $107
  • Platinum: $12

Control Prescription Expenses With an HSA

Because prescription medications are “qualified medical expenses,” health savings accounts (HSAs) can be used to purchase prescriptions before and after a prescription deductible has been met. Remember, that does not mean everything available at the pharmacy can be charged to your HSA.

From the Pharmacy Use Your HSA? Why?
Prescription Medication ✓ YES Because the medication has been prescribed by a doctor, it is a qualified medical expense.
Over-the-counter Medication × NO Medications that are not prescribed, such as cold medicines, will not be deemed qualified medical expenses.
Prescription Supplement ✓ YES Because the supplement has been prescribed by a doctor, it is a qualified medical expense.
Over-the-counter Supplement × NO Supplements that are not prescribed, such as daily vitamins, will not be deemed qualified medical expenses.

Medicare Part D Rx Deductible

Medicare Part D, which is a drug plan offered to Medicare enrollees, has different rules for its deductibles. Unlike those offered by employers or through the marketplace, no plan can have a prescription deductible higher than $400 in 2017. Deductible prices can still vary (with a maximum of $400), and some plans will not have a deductible.

Control Part D Expenses With Extra Help

While Extra Help does not lower Part D prescription deductibles, it does lower premiums for many seniors. If you need prescription coverage (as most of us do) but cannot afford Part D premiums, consider applying for Extra Help.

Learn More With HealthMarkets

Prescription deductibles may be easy to compare at a glance, but there are more complicated features of your plan you should also know about. HealthMarkets has a growing resource center filled with content just for you. Learn more about health insurance by reading our articles online, or get one-on-one guidance from a local agent.

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References

http://kff.org/health-costs/issue-brief/patient-cost-sharing-in-marketplace-plans-2016/
https://www.medicare.gov/part-d/costs/deductible/drug-plan-deductibles.html
http://www.thinkadvisor.com/2014/11/25/9-things-you-probably-didnt-know-about-your-health?migration=1&slreturn=1493068316

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