I was just exchanging emails with a contact at CMS (Center for Medicare And Medicaid Services) which is the department responsible for overseeing the Affordable Care Act implementation. Here is what I wrote him:
I thought you might be interested in something I learned yesterday when a client called me about her visit to the pharmacy to fill prescriptions under her new Health Net HMO Gold plan. She has no deductible in her plan (for which she pays around $300 per month after her subsidy). Her co-pay for generics is $20 on this plan, but when she bought them in the past at an El Rio clinic (which she used because she did not have health insurance) she paid between $5 and $15 for them. At CVS she was told she must pay $20 for each of her four generics plus a $3 service fee.
Thank goodness she called me. I called Health Net’s pharmacy department and the rep looked at my client’s account where she could see that CVS had run the prescriptions. The prices CVS wanted to charge were outrageous and Health Net said they would only approve $20 as the maximum – meaning my client would have to pay $20 (or essentially the full approved price).
So I made some calls and got the following prices:
| Walmart | Costco | CVS | CVS with insurance | |
| Ibuprofen 800 mg 30 pills | $4 | $6 | $11.99 | $20 co-pay |
| metformin 500 mg 60 pills | $4 | $7 | $13.99 | $20 co-pay |
| zolpidem 10 mg 30 pills | $38 | $13 | $49.99 | $20 co-pay |
| gabapentin 300 mg 30 pills | $15.98 | $11 | $33.09 | $20 co-pay |
I asked the Health Net pharmacy rep how CVS can charge whatever price they want. “Doesn’t Health Net negotiate the price like they do with Medicare Part D?”, I asked. The Health Net rep said CVS can ask for a certain price, but Health Net might not approve it, as they did in this case by setting $20 as the limit.
I can see that $15 or $20 co-pays for generics means the plans will rarely pay anything for their members’ generic drugs. This keeps costs down for the insurance company, but will shock many people like my client who will now pay more for their prescriptions than they did when they were uninsured. My client used the El Rio clinic, which most likely negotiates low prices for the drugs they buy – and their re-sale markup is probably minimal.
When I looked at Medicare.gov, the price for these drugs under Part D is:
Ibuprofen 800: $11
Metformin: $2
Zolpidem: $8.50
Gabapentin: $11
Why is there such a higher cost for these generic drugs under individual health insurance vs Medicare Part D? I thought insurance companies negotiated prices with pharmacies. Apparently this is not the case for individual insurance. I guess I need to look into this further and ask some questions of Health Net and CVS.