FC2 has the flu. She was prescribed Tamiflu which has a generic (Oseltamivir) available.
We dutifully filled the prescription for $71.11 an hour ago at our local CVS, the preferred pharmacy of my insurance company/employer. I believe the technical term for the preferred pharmacy/manager is the Pharmacy Benefit Manager (link).
Since we were using a generics at preferred pharmacy, I assumed that I was making the optimal decision.
In making the above assumption, it turns out I made an ass out of myself. A simple google query took me to this beautiful website: GoodRx.com, which offered the same drug for $39.99. They have an app if you prefer those to websites (though it seems that “apps” are the same thing as websites viewed on a phone).
Because I assumed, I overpaid by 78% (=71.11/39.99-1) at the same damn pharmacy!!!!.
On the surface, the GoodRx website seemed too-good-to-be-true. However, my litmus test for pretty much anything in life is whether the Bogleheads approve. 2 minutes on the forum convinced me that the Bogleheads overwhelmingly approve: https://www.google.com/search?sitesearch=bogleheads.org&q=goodrx.
The only remaining question is whether using GoodRx would preclude the prescription going towards my deductible. If the GoodRx expense counts towards the deductible, it’s an absolute no-brianer to use them. If not, then it becomes an interesting math problem (see nerd-fest section below). It seems the Bogleheads had mixed experiences on this one, so a call to your PBM would probably resolve that uncertainty.
While I haven’t used them before, GoodRx seems like a pretty incredible deal. Since the Bogleheads have vouched for them, I’m 99.9% sure it’s legit. I’m amazed/embarrased that I hadn’t heard of it before and will likely use them over my existing insurance going forward (with caveats explained in the nerd-fest analysis below).
It’ll be most valuable for those of us with high deductible health plans, particularly if you’re not expecting to hit the deductible/out of pocket max. If you’re planning on blowing through your deductible/OOP max, then the savings are moot since the marginal cost of healthcare is small past your deductible (20% in my case) or 0% past your out of pocket (OOP) max.
Thanks to Rob’s suggestion in the comments, I called up CVS and they said I could stop by for a refund. So I did. I am now a happy GoodRx customer. The only remaining uncertainty is whether it’ll count towards the deductible/OOP max. It’ll probably take a few weeks for the dust to settle to learn how my PBM (CVS) handles this.
It looks like my online CVS Caremark account has updated the price from $71.11 to $39.99, so it appears to me that I got the best of both worlds: better price and it counts towards deductible.
Upon further inspection, the CVS Caremark account indicates that $0 went towards my deductible. In the event that I hit my deductible this year, having used GoodRx will turn out to be less than ideal. In the event that I don’t hit my deductible, GoodRx will have saved us some decent money.
Assuming someone made it to this point in the article, I have a couple of questions for anyone who has used GoodRx. 1.) How was your experience? 2.) How large has been the cost savings? 3.) Did your GoodRx payments count towards your deductible (and is the answer to this dependent on where you fill the prescription)?
Nerd-Fest Probabilistic Analysis Computing the Magnitude of my “Mistake”
I did the following for my own benefit to help in my future decision making. It will be of zero interest to 99.9% of you.
The below attempts to answer the magnitude of today’s “mistake”. It’s a fun problem to think through because so much depends on the underlying assumptions. I’m fascianted by healthcare economics because 1.) it’s a fascianting math problem, 2.) healthcare constitutes a huge fraction of the typical family’s budget, 3.) the financial magnitude of optimal vs poor decisions are quite large, and 4.) it’s fascianting to see how different assumptions influence the “right” answer under uncertainty.
In the event that the GoodRx payment goes towards my deductible:
- If we don’t hit my deductible this year (which is my probably-unrealistic goal), I’ll bear the full $31 (=$71-$40) financial burden of my mistake.
- If we hit our deductible but not our out of pocket (OOP) max, this mistake will end up costing me 20%(my coinsurance after deductible)*$31 overpayment=$6.20.
- If we blow through OOP max, this mistake will cost me $0.
In the event that the GoodRx payment does not go towards my deductible:
- First bullet point above is unchanged
- If we hit our deductible but not our out of pocket (OOP) max, this mistake will end up costing me $71*20%(my coinsurance after deductible)-$40 = negative $26, meaning I’m $26 better off in this scenario! Why? Because 20% of $71 << 100% of $40.
- If we blow through OOP max, this mistake will benefit me by $40 (=$71*0%*(zero financial burden after hitting oop max) – $40 = negative $40). 0% of $71 <<< 100% of $40.
The true cost of my “mistake” is computed as:
Probability of this payment counting towards deductible * ($31*prob of not hitting deductible + $6*prob of hitting deductible but not OOP max + $0*prob of exceeding OOP max)
Probability of this payment not counting towards deductible * ($31*prob of not hitting deductible – $26*prob of hitting deductible but not OOP max – $40*prob of exceeding OOP max)
Which simplifies to:
$31*prob of not hitting deductible + $6*(prob of hitting deductible but not OOP max*prob of payment counting towards deductible) – $26*(prob of hitting deductible but not OOP max*prob of payment not counting towards deductible) – $40*prob of exceeding OOP max * prob of this payment not counting towards deductible
- I have a 50% chance of not reaching deductible
- A 5% chance of hitting deductible but not OOP max
- A 45% chance of hitting OOP max
- A 50% chance the expense would count towards deducible
Plugging in the paramaters above
Total expected cost of my “mistake” = $31*50%+$6*5%*50%-$26*5%*50%-$40*50% = NEGATIVE $5, meaning my “mistake” today makes me $5 better off, on average. Woot.
However, if I change the parameters to:
- I have a 80% chance of not reaching deductible
- A 5% chance of hitting deductible but not OOP max
- A 15% chance of hitting OOP max
- A 90% chance the expense would count towards deducible
Total expected cost of my “mistake” = $31*80%+$6*5%*90%-$26*5%*10%-$40*10% = $20.94, meaning the mistake is going to cost me $20.94, on average. Bummer.
Given that my family of 7 consumes healthcare like drinking water, perhaps the “decision” I unknowingly made today will turn out to inconsequential since there is a decent chance we’ll blow past our deductible/OOP max again this year. Nonetheless, if I could rewind the clock a couple of hours, I probably would have paid with GoodRx and hoped that the payment counted towards the deductible.