Quick Insurance Tips

Optional private medical insurance benefits such as prescription insurance may or may not be worth the extra money.  A bad decision here can mean that you are paying a $100 in extra premiums and getting something less than $100 in value in return.

Prescription Insurance Comparison

There are a lot of companies offering cheap health insurance and prescription coverage.  When evaluating these insurance plans verses similar plans that don’t offer prescription coverage, look at the benefits verses the costs before making a final decision.

Often the prescription coverage will have a low annual dollar limit.  This reduces the value of this benefit.  Typically the base policy limits are in the millions on a health plans offered to individuals or to the self employed. Prescription insurance limits however are usually lower.

You will need to convert the monthly cost into an annual cost to make an easy comparison.

If your Aetna insurance prescription plan has a $5,000 limit and costs an extra $200 a month, you are spending $2400 a year in order to have the potential of receiving $5,000 in return.  In this scenario, the most you can lose by not having this coverage is $2,600.  This is the difference between the cost of the coverage and the maximum benefit you could be paid.

This also means that the insurance company would have to cover $2,400 in prescription benefits in a given year for you to benefit from buying this insurance coverage.  This $2,400 is the cost of the prescriptions after your co-pays or other cost shares are deducted from the cost of the drug.

You may benefit from getting a discounted price from your pharmacy when you have certain insurance policies, however you may get the same discount whether or not you have the prescription rider.  This discount should be factored in before making a final decision on the coverage.

However you may not need a health insurance or prescription rider to get cheap Rx. Insurance isn’t necessary to get prescription discounts. You may be able to get your generic prescription for a few dollars at Wal-Mart or one of the other pharmacies that are aggressively pushing discounted drugs.

When buying insurance or anything else, make sure that you receive a dollars worth of value for every extra dollar you spend.  The cost for prescription coverage sometimes is too high for the benefits received.  However sometimes it is a lifesaver.  It all depends on the price and the benefits.