Alternative Programs: Non-Insurance Savings
Many Americans cannot afford sufficient health coverage, nor can some small business owners do as much as they'd like to help them out. Fortunately, a number of alternative programs do provide the means to save money without sacrificing quality care. Prescription and medical discount cards, patient assistance programs, government plans and health savings accounts are excellent options when budgets are tight. Here are the details:
Discount prescription programs. Prescription
drug discount cards, alternately called consumer-,
point-of-sale- and 100-percent-co-pay cards, enable
holders to save money on a wide range of prescription
drugs, and in some plans, over-the-counter medications
as well. Discounts typically apply to both brand-name
and generic products. By presenting their computerized
plastic card upon purchase, participants immediately
receive associated discounts.
While uninsured persons will benefit most from these programs, even individuals with coverage may find them useful, since most health plans exclude some medications.
Savings vary according to the card issuer, but can range from 20 percent on brand names and up to 70 percent on generics. Stipulations do exist, though. For instance, some plans require that users be under the care of a licensed physician practicing in the United States; others require that applicants without prescription insurance must meet income guidelines; and some exclude individuals enrolled in government-sponsored discount programs.
- Patient assistance programs. A number of major pharmaceutical companies provide free medications to individuals who cannot afford to buy medications. Also referred to as medication assistance-, indigent drug- and charitable drug programs, these initiatives are not government-run, so eligibility requirements and benefits vary from provider to provider. For a comprehensive database of these participating companies, visit RxAssist at http://www.rxassist.org.
Medical discount cards. Medical discount cards
can offer more affordable healthcare to the millions
of uninsured Americans, so they may be an option for
small business owners who currently do not provide
coverage. With cards, participants pay out-of-pocket
for their medical care, usually at lower prices than
most healthcare providers' normal rates. It is
important to note, however, that many states don't
regulate the companies offering these discount
As for the amount of savings and scope of medical services covered, these vary by card. Participants pay monthly or annual fees to qualify for the medical discounts. Specialists often can be seen without referrals, and some cards don't cap the amount of program usage.
- Government programs. Most states, as well as the District of Columbia, Guam and Puerto Rico, operate programs to help low-income people with their healthcare expenses. Details on each state's program are available online or via local health departments.
Health savings account (HSA). Created by the
Medicare Modernization Act, HSAs help employers lower
the cost of providing healthcare, while allowing
individuals more control over their care decisions -
specifically, over how they apply their benefits.
HSAs offer tax incentives to business owners, too. While a HSA isn't a "health insurance plan," per se, the employer incurs no costs for offering an HSA, other than those associated with managing it.
Here's how these plans work: Health savings accounts allow taxpayers to put aside pre-tax money to pay for future medical costs. To qualify, participants must be enrolled in a High Deductible Health Plan (HDHP). Individuals or employers then make the pretax contributions to the accounts. Withdrawals from HSAs are tax-free, provided the funds are used for qualified health expenses, including deductibles and costs not covered under the medical plan portion.
Advance notice of withdrawals isn't required, but the method of getting hold of the cash, check, debit card or other means varies by HSA. Unlike a flexible spending account (FSA), unused money in HSAs is not forfeited at year's end, but continues to grow without tax liability.
Since individuals own their HSAs, the savings move with them as jobs change, even into retirement. In fact, individuals age 65 or older do not incur penalties for withdrawing funds. In the event of the holder's death, the account can be transferred to a beneficiary - tax-free for spouses.