Benefits and Compensation, HR Management & Compliance

The Impact of High Prescription Costs on Employees and How to Help

Many people were surprised to enter the new year with a higher price tag attached to their prescription medication. And It’s no wonder why: Between January and July 2019, prescription prices increased by more than 10% across more than 3,000 different drugs.1

pillBesides rising medication costs, health insurance deductible resets leave many employees with sticker shock come January. Families are often forced to abandon their prescription at the counter, simply because they weren’t expecting higher out-of-pocket costs. In fact, nearly half (47%) of Americans in the past have chosen to avoid paying for prescription medication to be able to cover other expenses.2

For employers, there is power in educating employees on ways to better afford their medications and reduce overall healthcare spending. Here are a few key ways to accomplish this:

  1. Encourage workers to shop around and explore alternatives.

The majority of us assume our employee health benefits will offer the best price available when it comes to our medications. And nearly 86% of those with health insurance say that having health insurance is the most affordable way to obtain prescription medication.2 However, when it comes to buying prescriptions, shopping around can save your employees a lot of money.

Educate your employee base on the benefits of widening their scope of where they shop for their medications, such as online pharmacies, big-name retailers, and independent and grocery store pharmacies. Employees may also consider meeting with their primary doctor or pharmacist to learn more about possible alternatives, such as a less expensive, over-the-counter product or generic medication that might be just as effective.

  1. Highlight free, easy-to-use prescription saving tools.

The average American spends $600 annually on prescription medications.3 For most employees, pharmacy visits become a natural cycle of daily life. But what most employees may not know is how to balance the cost of their medications with everyday life. Nearly one in two Americans say medications are more costly than their groceries or car insurance, and the majority won’t know the price until they are at the pharmacy.3

Benefits leaders can help guide employees to online resources that make searching for prescription discounts quick and easy. There are several platforms out there that enable users to track the cost of their prescription medications at nearby pharmacies. By simply plugging in the name of the drug, dose, quantity of pills, and location, your employees can see what they can expect to pay at various retailers if they use their discount coupons.

  1. Underscore the importance of planning ahead.

The worst thing an employee can do is wait until an emergency to review his or her healthcare options. According to a recent report, only 31% of Americans have a health-related emergency fund dedicated to unexpected illness or last-minute prescriptions. The average health-related emergency fund consists of $1,601.4

Employers should encourage their employees to set aside funds to fall back on in the event of an emergency while helping them identify their local emergency room and in-network urgent-care facilities to avoid significant financial burdens in the future.

Today’s employers have an opportunity to better educate and offer peace of mind to their employee network as they navigate prescription price hikes and healthcare expense planning this year. Finding and implementing strategies to reduce healthcare costs will prove worthwhile for both your organization and the people who keep it afloat.

Sources:

1RxSaver. “Why Do Your Prescription Prices Increase in January?” December 23, 2019. https://rxsaver.retailmenot.com/blog/why-do-your-prescription-prices-increase-in-january/

2Kelton. The RetailMeNot Q2 PR + RxSaver 2019 Survey was conducted between February 2, 2019, and February 6, 2019, among 1,062 nationally representative Americans aged 18+.

3Kelton. The RetailMeNot Q1 PR + RxSaver 2019 Survey was conducted between February 2, 2019, and February 6, 2019, among 1,062 nationally representative Americans aged 18+.

4 Kelton. The RxSaver by RetailMeNot Holiday Health Report 2019.