FLEXIBLE SPENDING ACCOUNTS
Save by reducing taxable income
Surprisingly, these accounts, offered by many companies, even small ones, are often not used by consumers -- so if you didn't sign up for 2009, consider it next time around. Employees of companies that offer the accounts can have set amounts (minimums and maximums are set by each company) taken from their paychecks pretax and put into these accounts to be used for health expenses as major as brain surgery or minor as contact lens solution. (Each company can decide what it will allow in its specific plan; you can get a good idea of allowed expenses under the federal government's flexible spending program at www.fsa feds.com/fsafeds/eligibleexpenses.asp. According to Laurie Brubaker, a benefits expert with Aetna, which administers some of these accounts for businesses, setting aside $2,000 from a salary of $25,000 will create a tax savings of $450. Use Aetna's calculator to match your allocation with your salary at www .aetnafsa.com/fsa/index.php.
Spend it or lose it
Many people often don't open an account because any money left at the end of the year is forfeited. Cathy Tripp, a senior consultant in the Minneapolis office of benefits consulting firm Watson Wyatt, suggests making a list of medical needs for the year, including prescription sunglasses and new contact lenses or a visit to the doctor to check on an allergy, and making those appointments before the benefit year ends. And remember: The money is deducted over the course of 12 months, but the full amount you choose to set aside is available to you from the first day of your benefit year.
Review what you take with a doctor
Shopping for lower prices isn't necessarily the first step you need to take if you want to lower your prescription drug bill, says Michael Cohen, president of the Institute for Safe Medication Practices in Horsham, Penn. First, review the drugs you take (a good practice once each year regardless, doctors say), to determine whether you still need the drug or that dose and whether you could safely substitute a less expensive option for the drug.
A visit with your doctor to review the drugs is your best bet. If you're concerned about the cost of the visit, you can ask if the doctor will go over your list by phone. (And see below for strategies to reduce the cost of an office visit.) A local pharmacist can also review your drug list and make suggestions to your physician for changes, but never stop taking a drug unless the doctor has specifically given you the OK.
Ask your pharmacist if your particular medicines can be split or if you can use two lower doses to make up the dose you need. Review the costs, including any co-pays. Those options can sometimes save money over the cost of buying the exact dose prescribed. Then . . .
Sure, the corner drugstore may be convenient, but it may also be expensive. According to the National Center for Policy Analysis in Washington, D.C., comparing prices among local pharmacies can save consumers almost 10% on brand-name drugs and up to 81% on generic drugs. You can check comparison prices in your area at www.destinationrx.com, but also call the local pharmacy to confirm. And some pharmacies may match competitors' prices. Costco's prices for brand-name drugs often rank among the lowest, and the warehouse store doesn't require a membership fee for people buying only prescription medicines.
Don't assume Internet prices are cheapest. Local pharmacy prices for a 30-day supply of the cholesterol drug Lipitor (80-milligram dose) hovered around $83 recently. The same drug cost $119.99 at drugstore.com.
Go for the generic
This year, many pharmacies, supermarkets and big retail stores such as Walgreens, Ralphs and Target began offering hundreds of generic drugs for as low as $3 per month per prescription. Not all stores offer all generics for the low price, and the list can vary from chain to chain, so check by phone or at the store's website. CVS charges $10 per year for a savings pass that entitles cardholders to buy 90-day supplies of more than 400 generic drugs for $9.99 each. That fee also gets you some discounts on nonprescription drugs and on visits to its Minute Clinics, staffed by nurses who can give some vaccinations and treat minor illnesses. As the economy continues to falter, expect more deals from drugstore chains. Kmart, for example, lets many customers at most stores buy one of several nonprescription products such as pain relievers and a decongestant for the discounted price of $1 each time you buy a prescription, for a savings of about $3 to $6. Find the website addresses for the stores you frequent and sign up for alerts.
Buy in bulk