The High Cost of Five Percent: The Importance of Capping Annual Out-of-Pocket Prescription Drug Costs for Medicare Part D Beneficiaries

This blog was originally published by Cancer Support Community by Kim Czubaruk here.

Tuesday, June 25, 2019

Background on Medicare Part D

Approximately 43 million Americans are enrolled in Medicare Part D – a voluntary outpatient benefit provided through private health insurance plans approved by the federal government. These plans assist seniors in affording their prescription medications. However, for people with complex and serious health conditions who depend on high-cost drugs, affording medications under Medicare Part D is becoming more and more difficult. Below is a break-down of the different payment phases in Medicare Part D and an explanation of why imposing a cap (limit) on the amount beneficiaries pay out-of-pocket each year for prescription drugs is more important than ever.

The Different Payment Phases of Medicare Part D

While there are some differences between Part D plans, all Medicare Part D plans have the following:

  • A Monthly Premium – varies in cost by the plan selected (averaging $33.19/month in 2019) and must be timely paid each month to maintain coverage.
  • An Annual Deductible – varies in cost by the plan selected (but cannot exceed $415/year in 2019) and must be paid in full by the beneficiary before the Part D plan covers any costs of prescription drugs.
  • The Initial Coverage Phase – begins after the beneficiary has paid his or her annual deductible and triggers the Part D plan’s obligation to cover its share of the cost of the beneficiary’s prescription drugs.
  • Coverage Gap Phase (also known as the Doughnut Hole) – begins after the beneficiary and the Part D plan have paid a combined pre-determined amount for prescription drugs ($3820 in 2019) and triggers a phase where the beneficiary is obligated to pay the entire cost of his or her prescription drugs.
  • The Catastrophic Phase – begins after the beneficiary has paid a pre-determined amount in out-of-pocket costs ($5100 in 2019) for prescription drugs and triggers reduced beneficiary cost-sharing obligations for the remainder of the coverage period (in 2019, either 5% of the cost for each prescription medication, or $3.40 for each generic drug and $8.50 in for each brand-name drug, whichever is greater).

Catastrophic Phase of Medicare Part D

Thankfully, most Medicare Part D beneficiaries in 2019 will not have out-of-pocket prescription drug costs that exceed $5100. However, the high price of prescription drugs used to treat cancer and other serious medical conditions is causing more and more Medicare Part D beneficiaries to reach $5100 in out-of-pocket drug costs, sometimes early in the calendar year. When this happens, a beneficiary enters the Catastrophic Phase of Medicare Part D. What does this mean and why is it important?

  1. Once in the Catastrophic Phase, a beneficiary pays 5% of the cost for each prescription medication, or $3.40 for each generic drug and $8.50 for each brand name drug, whichever is greater;
  2. This payment obligation continues for the remainder of the calendar year;
  3. There is currently no cap or limit on the amount a beneficiary pays out-of-pocket annually in the Catastrophic Phase.

The 5% beneficiary cost-sharing in the Catastrophic Phase is the lowest cost-sharing percentage in Medicare Part D and is intended to minimize the cost burden on beneficiaries who have already incurred high out-of-pocket drug costs in any given calendar year. However, unlike commercial insurance plans, Medicare Part D does not cap or limit a beneficiary’s out-of-pocket prescription drug costs in a calendar year. Despite the good intentions behind the low 5% cost-sharing, the combined effect of high-priced prescription drugs and the absence of an out-of-pocket cap is making the Catastrophic Phase the costliest of all Medicare Part D Phases for an increasing number of beneficiaries.

Out-of-Pocket Cap in Medicare Part D

Creating an out-of-pocket cap for prescription drug costs in Medicare Part D would protect beneficiaries from unaffordable prescription drug prices and enable cancer patients and others confronting serious health conditions to focus on their health and take steps to avoid financial toxicity. There is draft legislation currently pending in the United States House of Representatives to cap out-of-pocket costs for Medicare Part D beneficiaries. The Cancer Support Community is encouraged by this development and will continue to monitor the progress of the draft legislation and voice the interests and concerns of cancer patients throughout the process.

To learn more about issues impacting cancer patients and engage in advocacy efforts, sign up to be a member of our Grassroots Advocacy Network.

A Consumer’s Guide to Drug Discounts

This blog was originally published by Everyday health By Debra Fulghum Bruce, PhD, on April 8, 2019, here.

Sponsored by GoodRx

There are ways that you can minimize the effect that the accelerating prescription drug crisis has on your healthcare.
Ralf Hiemisch/Getty Images

Have you ever had to choose between buying groceries or paying the rent and filling a drug prescription? Have you or has someone you know ever skipped taking medication because of the cost? You’re not alone. Millions of Americans are feeling the burden of increasingly costly prescription drugs, and they’re making choices that could jeopardize their health.

Today, the amount consumers have to pay out of pocket for prescribed drugs is rapidly escalating, from about $25 billion in 2000 to a projected $67 billion in 2025. (1) To make matters worse, more than 8.8 percent of American adults, or roughly 28.5 million people, do not have health insurance and must pay for all prescription medications themselves. (2)

But there are ways that you can minimize the effect that the accelerating prescription drug crisis has on your healthcare. This guide to drug pricing and discounts provides the answers to common questions and offers practical information that every consumer needs to know.

Why Are Prescription Drug Prices So High?

Did you know that Americans pay the highest costs for prescription medications in the world? (3) You can partly attribute the exorbitant prices to an intricate and extensive drug research and development (R&D) and approval process, along with an equally complex healthcare system. (4)

No doubt, we have benefited from innovations in the management of diseases for which there were few or no treatment options before. But opponents of the pharmaceutical companies argue that just a small percentage of the drug companies’ costs are used for R&D, with most of the money spent on administration and brand-name drug marketing.

Drug companies don’t tell the whole story behind the rising cost of prescriptions. There are third-party administrators known as pharmacy benefit managers (PBMs), who are paid to negotiate prices between pharmacies and large insurers. These PBMs charge pharmacy providers either a percentage or a flat fee for every prescription filled, which contributes to higher drug prices. (5)

How Can You Save Money on Medication?

Consumers have options when it comes to getting the lowest prices on prescription drugs.

First, if you aren’t shopping around for medications at local pharmacies, using online coupons, or joining buyers’ clubs at drugstores, you’re probably paying way too much.

Just because your pharmacist quotes you a price does not mean that’s the lowest price for that prescription. Comparison shopping for prescription medications can be as quick and easy as following the helpful tips below, reviewing a few websites, and printing some money-saving coupons.

12 Ways You Can Cut Your Drug Costs

These 12 surefire tips will help you save on prescription medications so that you can put the extra funds to other important uses.

1. Try Generic Drug Options

More than 80 percent of all drugs today are generics, which use the same active ingredients as brand-name medicines and work the same way but tend to cost a lot less than their pricey brand-name counterparts.

The cost-saving news is that manufacturers of generic drugs do not have to repeat the animal and clinical (human) studies that were required of the brand-name medicines to demonstrate safety and effectiveness. Also, the competition among multiple companies producing a generic version of a drug helps keep the prices low for consumers.

According to the Food and Drug Administration (FDA), to gain approval a generic drug must be the same as the brand-name product in the following ways:

  1. Able to reach the required level in the bloodstream at the correct time and to the same extent
  2. Manner in which it is taken (whether inhaler, liquid, or pill)
  3. Strength
  4. Testing standards
  5. Use and effects
  6. Working ingredients

Generics may differ from brand-name counterparts in terms of other characteristics that don’t affect the drug’s performance or safety, like flavorings.

What you should do Talk to your physician and pharmacist about generic equivalents of your brand-name drugs and consider switching.

2. Search for Discount Coupons Online

A simple Google search of your prescription drug, over-the-counter medicine, or healthcare supplies will bring up pages of websites offering money-saving coupons.

Drug coupons cannot lower your copay, but your pharmacist may apply the coupon to your drug purchase to lower the price.

Scroll through the available sites online to find rebates for your medicine, too. Because pharmacists may run prescriptions through insurance first, make sure the pharmacist is aware of the discount coupon or rebate before you pay the final cost.

What you should do Before you head to the pharmacy to fill a prescription, do a quick Google search to check for money-saving coupons and rebates.

3. Use an App to Compare Local Drug Prices

There are several websites and mobile applications that can help you find the best price available for a prescription drug.

One of the most widely used is GoodRx, which allows you to comparison shop and get coupons toward medications. GoodRx collects and compares prices and discounts that you didn’t know existed from more than 70,000 U.S. pharmacies, including CVS, Rite Aid, and Walgreens. (6) It allows you to print free discounted coupons or send them to your phone by email or text message. You can then use a GoodRx discount instead of your health insurance or Medicare Part D or Advantage plan if the cost is lower than your copay.

When you go to GoodRx.com, they will ask for the name of the drug, the dosage, the number of pills, and your zip code. Click the “Find the Lowest Price” button. You will see what you might pay at different chain pharmacies with a GoodRx discount coupon or voucher. You can then print or download the generated coupons and vouchers to your smartphone and show your pharmacist to get savings on your drug purchase. (7,8)

Similarly, Blink Health lets users browse local prices by simply searching for a prescription drug’s name. It also offers the option of having your medication delivered or ready for pickup. Another online and mobile service is OneRx, which lists drug prices in your area and offers discounts to consumers using the OneRx card.

RetailMeNot Rx Saver is a popular and easy-to-use app and program. Here you can search for prices on brand-name and generic drugs. Their coupons can be used an unlimited number of times at retail pharmacies such as Walgreens and CVS.

Other websites and mobile apps that offer drug coupons and rebates include ScriptSave WellRxEasy Drug Card, and Search Rx.

What you should do Check out these and other no-cost prescription pricing services to see what pharmacies in your area charge for your medications.

4. Join Your Pharmacy’s Prescription Club

No insurance or not enough coverage? You can find in-store pharmacy prescription clubs at many drugstores. These money-saving programs can lower drug and supply prices.

Also, the in-store programs provide up to an 85 percent savings on thousands of prescriptions, including commonly prescribed generic medications for heart health, diabetesasthmamental health issues, women’s health, gastrointestinal health, and other conditions. (9)

While these savings clubs are not health insurance, they can save you money at the pharmacy. (10)

What you should do Compare different in-store pharmacy prescription clubs to get the best prices when checking out. In-store pharmacies at retailers like Walgreens and Kmart also offer prescription clubs.

5. Shop Local or a Preferred Pharmacy Network

Independent pharmacies may beat major chain drugstores, supermarkets, and big box discounters on price — and by an impressive margin. Independents can also easily beat membership warehouses and clubs.

In contrast, the preferred pharmacy network is a group of chain pharmacies that likely give insurance plans a larger discount than other pharmacies.

The point is that drugstores have different prices — they can vary by hundreds of dollars — so be sure to ask ahead before you pick a specific pharmacy.

What you should do Call your local and preferred retail pharmacies before filling your prescription to find the lowest prices.

6. Use a Verified Internet Pharmacy

Verified internet pharmacies are those that have passed stringent reviews by the National Association of Boards of Pharmacy (NABP). These pharmacies often include “.pharmacy” in their URLs to show that they are in compliance with the NABP, although some verified pharmacies are .coms or .orgs. They also carry the designation VIPPS, for Verified Internet Pharmacy Practice Site.

While verified internet pharmacies have passed inspection and are deemed safe, be careful not to use a rogue internet pharmacy that is not verified. Check your internet pharmacy against the Find a Safe Site list to buy safely.

In a revealing 2018 study, Consumer Reports sent secret shoppers to 150 pharmacies in six cities across the country to ask for the retail cash prices for a one-month supply of five commonly prescribed drugs — essentially the prices someone without insurance might pay. The widespread range in prices they uncovered was shocking. While the five-drug “basket” cost was just $66 at the verified internet pharmacy HealthWarehouse.com, two national chain retailers had prices closer to $900 for the five drugs. (7)

What you should do It pays to shop around, and don’t forget to check internet pharmacies like HealthWarehouse.com for greater savings.

7. Use Mail Order for Medications and Supplies

Many pharmacies offer online ordering for drugs, diabetic supplies, over-the-counter medicines, hair supplies, and even pet medications. And you don’t have to have insurance. After placing your order, you will receive the drugs and supplies in the mail. Make sure the pharmacy is VIPPS accredited and certified. Your doctor will send the Rx by e-prescription to the proper phone number.

What you should do Generally, it will take one to five business days to process your mail order prescription, so it’s important to plan ahead. (11)

8. Get Free or Low-Cost Birth Control Online

Not only can you get great prices on medications online, several newer websites offer free or low-cost birth control to women in many states. Planned Parenthood DirectNurxPrjkt Ruby, and Maven Clinic offer telehealth services, virtual clinics, and prescription drugs delivered right to your door — and no insurance is needed.

What you should do Explore telehealth services and virtual specialty clinics that can save you time and money on birth control and other necessary medications.

9. Talk Openly With Your Doctor

Be vocal with your doctor about any financial issues you may have, and be sure to try one or more of the following five things at your next office visit:

  • Ask your doctor for free samples or coupons. Doctors usually have samples and coupons given to them by drug reps. It doesn’t hurt to try a free sample pack before filling a pricey prescription to make sure this drug will work for you.
  • Ask your doctor for a 90-day supply. This gives you one copay every three months instead of one every month.
  • Ask about mail order. If your drug plan has a mail-order option, you may be able to get the 90-day supply of medications at an even lower cost.
  • Ask about pill-splitting. Your doctor can prescribe a higher dose of medicine at the same price of the lower dose. You can split the drug in half or fourths to save. Scored pills are easier to split, but use a pill splitter (usually between $3 and $9 at most pharmacies) to avoid crushing the medication.
  • Ask for an exception. If you and your doctor can’t find an affordable option together, speak with your insurer about making a formulary exception and providing coverage for your drug. The formulary is a list of prescription drugs covered by a prescription drug plan or another insurance plan offering prescription drug benefits. (12,13) Your doctor will most likely need to submit a supporting statement, detailing that your drug is medically necessary and that any alternatives would have an adverse effect.

What you should do Be open and persistent. If your insurer denies your request for an exception, file an appeal. This requires that you work with your doctor to submit an application or letter of appeal.

10. Consider Patient Assistance Programs

Patient assistance programs (PAPs) are typically offered by pharmaceutical companies to provide free or low-cost prescription drugs to patients who lack health insurance or prescription drug coverage. You will need to fill out an application on the drug company’s website with your financial information. Your doctor may need to provide information about your prescribed medications.

The drug company will review the application and tell you if you’re eligible for assistance. If approved, many companies will ship a supply of the drug to your home or your doctor’s office. Your doctor will need to place a new order several weeks before the supply runs out.

What you should do Check out RxAssist.org, an online database of drug companies offering patient assistant programs that provide free or affordable drugs and copay assistance. (14)

11. Learn More About Medicare Part D

If you are 65 years or older and on Medicare Part D or Medicare Advantage, it’s important to understand how to get discounts on drugs. (15,16) Medicare Part D is an optional program to help Medicare beneficiaries pay for prescription drugs. Medicare Advantage Plan is a type of Medicare health plan offered by a private company that contracts with Medicare.

The insurer’s formulary of drugs that they cover can change at any time, so be sure to check the prescription medications you take on the Medicare.gov site to find the best Part D plan that works for you. (17)

While some people are able to use discounted coupons with Medicare Part D, most cannot unless they’re paying cash only. Of course, if you have a coupon for a drug not covered by your prescription drug plan, you can use this to lower your costs. (18,19)

What you should do Take advantage of online education such as the Drugs.com Medicare Support Group to ask questions, share opinions, and stay up with the latest news. (20) Also, check the Medicare.gov site for more understanding on how Part D works with other insurance.

12. Get It for Free, if You Can

Some large supermarket chains, including Publix, Harris Teeter, Schnucks, Price Chopper, Walmart, Sam’s Club, Costco, and ShopRite, will fill basic antibiotic prescriptions like amoxicillin for free. Supermarket pharmacies may give prenatal vitamins, metformin, antibiotics, children’s vitamins, and other commonly taken medications and supplements for free if you have a valid prescription. These meds and antibiotics are free for as long your doctor prescribes them. You just have to ask. (21)

What you should do You never know until you ask at the pharmacy to find out what drugs they provide customers for free. So be vocal!

Glossary Of Terms

When it comes to getting the best prescription drug prices, being an informed consumer is key. Knowing your cost-cutting options is more than half the battle, but it’s also important to understand many of the common terms used by drug companies, insurers, and pharmacies.

Here is a glossary of terms that you should familiarize yourself with.

Brand-name drug

A drug marketed under a proprietary, trademark-protected name.

Copay

A copay is a set rate that you pay for healthcare services and prescriptions at the time of care. For example, you may have a $25 copay every time you see your primary care physician (PCP). You may have a smaller copay for prescription drugs and a higher copay for the hospital emergency room.

Coinsurance

This is a percentage of a medical charge that you must pay, with the remainder paid by your health insurance plan, after your deductible has been met.

Deductible

The amount of money that the insured must pay before an insurance company will pay a claim.

Donut hole

This coverage gap with Medicare Part D means that after you and your drug plan have spent a certain dollar amount for prescription drugs, you have to pay all costs out of pocket for your prescriptions up to a yearly limit. Once you have spent up to the yearly limit, your coverage gap ends and your prescription drug plan helps pay for covered drugs again.

Drug coupon

Offered by drug manufacturers to consumers to reduce the price of their prescription drugs.

Drug rebates

Used by payers to reduce premiums and out-of-pocket expenses.

U.S. Food and Drug Administration (FDA)

The FDA is a federal government agency that is responsible for protecting the public health by ensuring the safety, efficacy, and security of human and veterinary drugs, biological products, and medical devices; and by ensuring the safety of the nation’s food supply, cosmetics, and products that emit radiation.

Generic drug

Drugs that use the same active ingredients as brand-name medicines and work the same way. Generic drugs are the same as brand-name drugs in dosage, safety, strength, how it is taken, quality, and intended use.

Mail order

Mail order services allow individuals to receive prescriptions conveniently through the mail.

Medicare Advantage Plan

A type of Medicare health plan offered by a private company that contracts with Medicare.

Medicare Part D

An optional program to help Medicare beneficiaries pay for prescription drugs.

Over-the-counter drug

A medicine that does not require a prescription.

Patient assistance programs (PAPs)

Offered by pharmaceutical companies, these programs provide free or low-cost prescription drugs to patients who lack health insurance or prescription drug coverage.

Pharmacy’s prescription club

A money-saving program that can lower drug and supply prices for people who don’t have insurance.

Preferred pharmacy network

A group of pharmacies that give insurance plans a larger discount.

Premium

A monthly payment you make to your health insurance carrier. Like any membership, you pay the premium each month even if you don’t use it. If you don’t pay, you will lose coverage.

Telehealth

Encompasses a wide range of technologies to deliver virtual medical and healthcare services.

Third party administrators (TPAs)

Also called pharmacy benefit managers (PBMs), they are paid to negotiate prices between pharmacies and large insurance companies.

Verified internet pharmacy

Online pharmacies that have passed rigorous reviews by the National Association of Boards of Pharmacy (NABP). Also referred to as VIPPS-Accredited.

A Patients’ Bill of Rights for Prescription Drugs

If you’re a patient, it’s important to understand the guarantees that you have in the healthcare system. This Patients’ Bill of Rights provides you with specific facts and recommendations on how to safely cut costs on prescription drugs.

  1. You have the right to safe, effective, and affordable medication. When it comes to affordability, Sara Rogers, PharmD, the director of clinical affairs at the American Society of Pharmacovigilance, says patients should consider using online tools and apps to identify the lowest price. You can then print or download the coupons and vouchers to your smartphone and show them to your pharmacist to save money.
  2. You have the right to pay less for prescription medications, using discounted coupons, rebates, and vouchers. Check one of the prescription pricing websites and apps to compare the cost of drugs and to find money-saving coupons on commonly prescribed drugs. Another way to save money, according to Jenny Sippel-Tompkins, the director of pharmacy at AdventHealth Orlando, “is to choose a drugstore with an internal discount program, like a $4 generic program, with a pharmacist that you have a relationship with.”
  3. You have the right to appeal to your health insurance company should they deny coverage of a drug or medical device. A letter from your doctor is needed, but don’t back down if you are denied. You can even contact Congress by finding out who your U.S. representative and senator are.
  4. You have the right to shop around. Call different pharmacies and ask for the lowest prices on prescription drugs. If you need to go to a different pharmacy to save money on one or more drugs, do so.
  5. You have the right to ask your pharmacist for the very lowest prices on prescription drugs. Previously, “gag clauses” prohibited pharmacists from telling shoppers about less costly options. Legislation signed into law in 2018 prohibits gag clauses.
  6. You have the right to go generic. Harris H. McIlwain, MD, a board-certified rheumatologist and geriatrician with two pain clinics in Florida, recommends that patients ask for generic drug equivalents, which are virtually the same as the pricey brand-name drug but much cheaper.
  7. Dr. McIlwain says, “Patients have the right to ask their doctor for a higher dose. You can ‘split the pills’ into smaller doses, helping you to save money.”
  8. Instead of a 30-day supply, ask the pharmacist what the charge might be for a 90-day supply. According to Sippel-Tompkins, “if you have a $15 copay for a 30-day supply, it might be cheaper to purchase a 90-day supply and not bill the insurance company.” The more medicine you get, the cheaper the cost is per pill.
  9. You have the right to ask your chain supermarket pharmacist for free medications such as metformin and antibiotics and prenatal and children’s vitamins. Many large supermarket pharmacies, including Publix, Harris Teeter, Schnucks, Price Chopper, Walmart, Sam’s Club, Costco, and ShopRite, will provide these medications and vitamins free with a valid prescription, but not unless you ask.
  10. You have the right to contact drug manufacturers and ask about patient assistance programs (PAPs). There are many programs offering free or discounted drugs to those in financial need or even to the general public. Do some homework and find out if your medications are provided free by the pharmaceutical company. Start by locating the pharmaceutical company online. Do a search for the name of the company and the patient assistance programs offered. Fill out the online forms and have your doctor fax a letter of medical need. You should hear back quickly if you are accepted, and they will mail the medication directly to you or your doctor.

Medical Bills, EOBs, and You

Medical bills are confusing, and often frightening. Even if it’s for something simple, the numbers add up fast, and to sometimes alarming levels. Add the Explanation of Benefits (EOB) documents you get from your insurer for the same clinical visit or hospital stay, and you can find yourself wondering how much you owe whom, and for what, exactly?

“Not A Bill”

This will be printed on all EOBs, and is the only sure way to tell which is an actual medical bill, and which is an EOB. However, an EOB can be confusing – other than that clear “Not A Bill” printed somewhere on the form.

This is one of the EOBs I got during my own cancer treatment. It’s for my lumpectomy, but the only way I’d know that is the dates on the form. The singular lack of information on what the EOB is for is one of the distinguishing characteristics of these forms, so knowing what the services were, and what your plan’s coverage is for those services, are important details. The numbers are indeed scary, given the Provider Charges of $50,231.25, and the Amount Paid of $0.00. Someone unfamiliar with EOB-ese might have a panic attack before getting to the important phrase “there is no liability on your part for these services” in Remark(s) Explanation 3.

“Statement of Account”

Here’s the summary bill from the hospital that covers the same services (my surgery), but this might only add to the potential for confusion.

The bill has slightly more detail than the insurer’s EOB, but not that much. It mostly seems to be to a series of magic incantations that take the starting amount – New Charges or Adjustments, $53,911.00 – and bring that down to an Amount Due of $50.00. My insurer paid $5,430.02, and there were Adjustments of $48,430.98, which leaves $50.00. On the one hand, hallelujah; on the other hand, what’s the story with that $48,430.98 “adjustment”?

If I didn’t have insurance, would I be on the hook for that whole $53,911.00? Probably, but it’s hard to know exactly. This is where the “chaos behind a veil of secrecy” that is healthcare pricing is most visible: hospital charges.

I learned a lesson from this bill, by the way: always ask for an itemized bill, not a summary bill. Ask for that during the admission process (if it’s a hospital), or at the medical office or testing facility during check-in.

Staying ahead of the healthcare cost curve

Here are my tips for figuring out your medical bills, and your EOBs, to ensure you get what you pay for, and only pay for what you get:

  • ALWAYS ask for an itemized bill, don’t just take a summary bill (the mistake I made with the billing for my own cancer surgery).

  • Review that bill, line by line. Make sure that it doesn’t have anything on it that you did NOT receive. Use CMS’s CPT code look-up tool to help you break down the blizzard of numbers. [CPT codes are the five digit service codes used by all medical providers; they’re in the column labeled Svc Code in the bill example above.]
  • Have your insurer’s Summary of Benefits documentation handy while you review the bill(s). That will be available on your insurer’s website.
  • Do not pay a bill until you get the EOB associated with those billed services.
  • Line up the EOB, and the bill, to make sure the dollars and the codes are correct.
  • Challenge any billed items that are for services you didn’t receive.
  • If services you received are listed as not covered by your insurer on your EOB, challenge that with your insurer’s customer service crew.

Yes, it takes work. And it’s a little crazy that the American healthcare system expects people, particularly sick people, to manage this blizzard of paper with scary dollar figures on it. But the only way to make sure you don’t pay more for your medical care than you should is to be proactive. It’s what empowered patients do.

Health Cost Literacy: “How much is that?”

The title of this post asks the $3.5 trillion-with-a-T question in American healthcare: how much is that? It often feels like healthcare is split into two camps, with one side working away feverishly to find more cures for life-threatening conditions like cancer and ALS, while the other side is working at an equally feverish pace to figure out just how many millions of dollars they can make of the latest breakthrough.

A recent example of this Tale of Two Healthcares was the roaring headlines about the first FDA-approved gene therapy, Kymriah (tisagenlecleucel), for leukemia. The business side of healthcare was ecstatic, pricing the drug at $475,000, which made Wall St. happy, and Novartis (the drug’s maker) ecstatic. The patient side of healthcare? Not so much.

Kymriah is an extreme example of healthcare pricing, but even trying to get a CT scan can turn into a trip down the rabbit hole, if you try to find out before the scan how much it will cost you. Asking “how much?” can seem like shouting down a well the first time you do it – you’ll hear an echo, because the person you’re asking will likely say “how much?” right back, in total shock at the question. However, asking questions is how we get answers, right?

Here are tips for asking “how much is that?” and getting meaningful answers:

  • Find out if your insurer has a cost-estimator tool. If so, use it. For everything required for your care. You’ll need the insurance billing code for the test, scan, or procedure (called the CPT code), so get that from your doctor’s billing office.
  • Use online price-check tools like Clear Health Costs or Fair Health Consumer to reality-check the pricing information you get from your insurer’s cost-estimator tool.
  • When your doctor refers you to a lab for testing, or an imaging center for scans, ask if they know what the cost is. They likely won’t at first, but the more of us who ask the question the more they’ll want to know the answer.
  • Call around to labs and imaging centers in your insurer’s network to ask about their cash price for the test or scan that’s been ordered for you. Depending on the cash price, you might be better off not using your insurance, and actually paying cash for the test or scan. If you have a high-deductible plan, you’ll need to assess which medical services are worth going off-the-books for if you haven’t yet met your annual deductible.

I know a lot about “how much is that?” because I was uninsured for five years after my own cancer treatment ended. I discovered that asking the question got me the answers I needed, and I could choose the providers that could give me a cash price for the mammograms and follow-up oncology services I needed. I’ve continued to use the simple question “how much is that?” every time a doctor has ordered tests or scans, because even with insurance, you’ll wind up with a bill for some part of the service.

If we all work together, asking “how much is that?” before receiving any medical service, we’ll start to shift the system, and the culture of healthcare. It takes a village, not just to raise a child, but also to change a status quo.

It’s your turn. Start asking.