Prescription card vs. insurance card: Knowing the difference

Key takeaways

• Prescription cards and insurance cards can both help reduce your out-of-pocket drug costs. Prescription cards offer immediate discounts on medications, while insurance cards sometimes allow for direct billing.
• You may not use your prescription card and your insurance card together, but carrying both could still be beneficial. A prescription card might help you pay less for medications, especially those not covered by your insurance plan.
• Although you can’t use insurance and prescription discount cards together, you may be able to pay for eligible discounted medications using an HSA, FSA, or HRA.

Overview

People often face high out-of-pocket medication costs. Even if you have insurance coverage, copayments, coinsurance, and deductibles can mean you pay a lot of money for medications. 

Prescription discount cards are different from insurance cards. They can help reduce medication costs at the pharmacy counter by offering coupons and discounts.

While you can’t use your prescription card and your insurance card together, it may benefit you to carry both. A prescription card might help you pay less for medications, and in particular, those not covered by your insurance plan. 

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What is an insurance card? 

An insurance card contains information about your personal health insurance.

You would present it whenever a healthcare professional or pharmacy needs to check whether your coverage is active or when they bill your insurer for eligible treatment costs. Your insurance card typically includes your name, member ID, your plan number, and your plan name.

Your insurance card won’t show what drugs your insurer covers, but you can access that information by looking at the plan’s formulary, or list of covered medications.

The formulary is usually included in the summary of benefits and coverage section of your insurance plan’s website. You can also call your insurer or look at any paperwork they have sent you to check whether they cover a specific medication.

What is a prescription discount card?

A prescription discount card offers savings on prescription medications, including those not covered by insurance. It is typically free to sign up for a prescription discount card, and you can use it right away.

You would present the discount card and, in some cases, a coupon to the pharmacy when you fill the prescription, and the store should apply the discount. You don’t have to submit receipts or wait for reimbursement.

It is important to know that if you use a prescription discount card or coupon, this is not likely to count toward your insurance plan’s out-of-pocket maximum.

Which offers more savings? 

If your insurance covers prescription medications, it can be more cost-effective to use your insurance plan. Although you might have to pay a copayment or coinsurance, using insurance may mean you pay less out of pocket overall.

So, in the case of the insurance card, your insurer should pay most of the cost, with you paying a copayment or coinsurance only. In the case of a prescription discount card, on the other hand, you pay the full discounted cost of the medication.

If your insurance doesn’t cover a medication, a prescription discount card can be an important source of savings. Some discount cards, like the Optum Perks Discount Card, can offer up to 80% discounts on many medications.

Can you use them together?

You typically cannot use an insurance card and a prescription discount card together. To figure out which one is best for you, consider comparing your out-of-pocket costs.

If you have insurance, your plan likely has a deductible, and any prescription you pay for using a prescription discount card does not count toward the total deductible.

As an example, let’s say you want to fill a prescription for a drug covered by insurance that costs $100, and your drug deductible is $500. If you use your insurance, you will pay $100 out of pocket, but you would have only $400 left to pay toward your deductible until the plan covers costs in full.

A prescription discount card may offer the same drug for $50. You can pay the discounted rate of $50, but this will not count toward your insurance plan’s prescription drug deductible.

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Can you use prescription discount cards with HSAs and FSAs?

You can use a health savings account (HSA), flexible spending account (FSA), or health reimbursement account (HRA) to pay for a prescribed medication with a discount applied. Read more about how these accounts differ.

HSAs, FSAs, and HRAs are savings accounts that you or your employer contribute to. When you use this money to pay for eligible health or medical expenses, the money is tax-free. 

Eligible health expenses include prescription medications.

In order to open an HSA, you must also have a high deductible health plan, which you may find through the Health Insurance Marketplace.

Pros and cons of prescription and insurance cards

Prescription cards and insurance cards both have pros and cons. 

Prescription cards

The pros of prescription cards may include:

• It’s free to sign up.
• You can use it immediately.
• You can use it with prescription medications that are not covered by insurance.

The cons may include:

• Discount prices can fluctuate.
• Discounts can vary between cards and pharmacies.
• Costs don’t count toward an insurance plan’s out-of-pocket limits.

Insurance cards

The pros of insurance cards may include:

• They can cover most of the cost of a prescription.
• Out-of-pocket costs count toward deductibles.
• Coverage is consistent across pharmacies and retail outlets.

The cons may include:

• You may pay monthly premiums.
• You need to pay the full cost until you meet your deductible.

Summary

Prescription cards and insurance cards can both be important ways to manage healthcare expenses.

Insurance cards outline the details of your health insurance coverage so that a pharmacist or healthcare professional can check your policy status and confirm coverage.

Prescription discount cards offer a reduced cost on medications, sometimes offering savings of up to 80%.

You cannot use insurance and prescription discount cards together, but you can pay for eligible discounted medications using an HSA, FSA, or HRA.

Download the free Optum Perks Discount Card to save up to 80% on many prescription medications. Plus, you can now get them delivered to your home in as little as 3 days. Search for your medication here.