A prescription drug discount card can be used even if you have Original Medicare with a stand-alone Part D plan, or a Medicare Advantage plan with prescription drug coverage. However, you must choose which one to use: the Medicare coverage or discount card price. You may not use both. Always compare the cost of your prescription and what you will be paying out-of-pocket under your Medicare coverage, versus what you will be paying for the drug out-of-pocket with the discount card. Choose whichever one provides you the best price.

How Does Medicare Part D Work?

Medicare Part D has four stages of annual coverage. You may pay a different amount for each stage:

  • Stage 1: You are responsible for paying all your prescription drug costs until you meet the plan’s deductible. For example, if your deductible is $400, you will pay $400 out of your pocket for your prescription drugs before your plan begins paying a portion.
  • Stage 2: Your Medicare Part D plan begins paying a portion of your prescription drug costs. You will pay a fixed amount (a copay or coinsurance) for your drugs until you reach a certain amount of covered costs. This amount may change annually.
  • Stage 3: This is the “gap” stage of your coverage, also known as the “donut hole.” You have less coverage during this stage. In 2022, when you have paid $4,430 for your prescription drugs, you enter this “gap” period and pay 25% coinsurance for covered brand name or generic drugs.
  • To reach the $4,430, everything you have paid during the year on covered drugs is counted. This includes your deductibles, copays, coinsurance, and what you have paid for the drugs. The only costs not included are the premium you pay for your Medicare Part D prescription plan and costs you incurred by purchasing drugs not covered by your plan, and any dispensing fee that may be charged by your pharmacy.
  • Stage 4: Catastrophic coverage stage. Once you have spent an annual total of $7,050 in out-of-pocket costs for your prescription drugs, the amount you pay for each prescription drops to the greater of $3.95 or 5% coinsurance for generic drugs or the greater of $9.85 or 5% coinsurance for brand name drugs. There is no cut-off amount.

How Much Can I Save By Using a Medicare Discount Card?

You determine the savings before purchasing the drugs but it is important to keep in mind what this may look like:

  • For some drugs, you may save up to 85% of the retail cost, although generally, you will save from 15 to 20%. You will save more if you buy generic drugs.
  • Present the card to the pharmacist and ask for a quote for the price of the drugs. Then you can decide whether you prefer to use your discount card or will you be better served by using your Medicare prescription drug plan.
  • Some pharmacies will provide you this information over the phone. Others have mobile apps that help you find the most affordable prescription drug in your geographical area.
  • The discount drug will add a transaction fee onto the cost at the end. Consider that extra cost when determining if it is in your best interest to use this card.

What are the Main Reasons to Use a Discount Card?

There are times when it simply just makes sense to use a discount card, those times include:

  • When your Medicare Advantage plan or Medicare Part D plan does not provide coverage for the prescribed drug.
  • When comparing prices, using a discount card is cheaper than using your Medicare benefit.
  • When you are in the “donut hole” and have a high coinsurance fee.

Remember that when you use a discount card instead of your Medicare benefit, the amount you pay for your prescription does not count toward your Medicare Part D deductible.

What Should I Look for in a Prescription Discount Card?

Not all prescription discount cards are alike. There are some things to look for and some things to be cautious of:

  • Do not pay for the card. There are many cards issued free of charge. The cards that are free provide the same discounts as those that charge an annual fee or an enrollment fee.
  • Do not provide any personal information. If a company asks for this information, that is an indication it plans on selling the information to third party marketers.
  • Be sure your preferred pharmacy accepts the card. For example, a CVS discount card is not one you can use at Walmart.

Can I Use Single Care with Medicare?

Single Care is a discount card, and the same rules apply as apply to any other discount card: You can use it, but you cannot use it and your Medicare Part D benefit for the same prescription.

Why Can’t Medicare Patients Use Coupons?

Prescription drug manufacturers often offer coupons for their product that offer a substantial savings over the full price of the drug. You can use these coupons if you only use coupons.

It is illegal in all states to use both a discount coupon AND your Medicare Plan D benefits for the same purchase. As mentioned earlier, it is up to you to determine which one offers the lowest cost, your coupon or your Medicare Part D plan.

Sources:

  1. Medicare Prescription Drug Discount Card and Transitional Assistance Program, CMS.
  2. FAQs: Important Information About Medicare Health Plans, Kaiser Permanente.