Are Online Discount Websites Helping Medicare Beneficiaries?

Medicare beneficiaries, many of whom live on fixed incomes, look for ways to make the costs of health care more affordable. Prescription drug costs comprise about one-quarter of beneficiaries’ out-of-pocket health care spending each year; most beneficiaries take at least one prescription drug regularly. In 2022, 14 percent of beneficiaries age 65 and older said they skipped a dose or didn’t fill a prescription at the pharmacy because of its costs.

Beneficiaries have options and make trade-offs to lower their costs and afford their prescriptions. One recent option is companies that offer prescription discounts. An increasing number of private, for-profit companies, including GoodRx, Amazon, BlinkRx, and Cost Plus Drugs, offer medication discounts via physical cards or online promotions. But there is one important limitation: beneficiaries cannot use these online discounts with Part D drug coverage.

We surveyed Medicare beneficiaries about whether and why they have used these discount sites and then examined their responses by type of Medicare coverage, age, gender, income, and race/ethnicity. These data were collected as part of the Commonwealth Fund 2023 Health Care Affordability Survey and included 2,077 Medicare beneficiaries living in the community (as opposed to nursing homes or other facilities).

How Do GoodRx, Cost Plus Drugs, Amazon, and Other Drug Discount Websites Work for Medicare Beneficiaries?

Medicare beneficiaries may access prescription drugs from the sites in different ways. While GoodRx provides coupons that are brought to pharmacies in-person, Amazon and Cost Plus Drugs provide patients the option of receiving their medications through the mail, and BlinkRx allows patients to select either in-person or mail order.

In certain circumstances, a person with Part D prescription drug coverage may pay less with these discount sites than with their Part D plan. For example, a prescription could cost $400 out-of-pocket at the pharmacy, and $200 with Part D insurance. If GoodRx offers a 55 percent discount on the prescription price, then the beneficiary would pay $180 with GoodRx, a $20 savings over their Part D coverage.

But, beginning in 2025, beneficiaries’ out-of-pocket costs for Part D covered drugs will be limited to $2,000 annually. To have their drug spending count toward this limit, beneficiaries must use their Part D coverage. Thus, discount savings on any particular drug must be compared to the long-term savings that might be achieved by reaching the Part D out-of-pocket limit.

How Many Medicare Beneficiaries Are Using Drug Discount Websites and Why?

About one of five beneficiaries said they had used one of the sites in the past year. There were no significant differences across demographic characteristics, including age, gender, race/ethnicity, and income. The percentage who said they used a prescription drug discount site did not differ significantly among those in Medicare Advantage versus traditional Medicare (17% vs 21%).

Of those who said they used the sites in the past 12 months, 85 percent said they did so because the cost of the drug was lower on the site than through their health plan. About one of five (22%) said they used the sites because it was more convenient than using their health plan. Four percent said they used the sites because they didn’t have insurance coverage for the drug. The reasons beneficiaries gave did not significantly differ by coverage, age, gender, race/ethnicity, or income.

These sites’ lack of prior authorization requirements may mean beneficiaries can get their prescriptions faster than through Part D since they don’t need approval from providers or insurers, making the sites more convenient than Part D coverage. In 2024, one of five Medicare Advantage beneficiaries (22%) reported their care was delayed because it needed approval, compared to 13 percent of beneficiaries in traditional Medicare.

Implications of Drug Discount Sites for Medicare Beneficiaries

Most Medicare beneficiaries said they used these sites, in lieu of their insurance, to save money, indicating beneficiaries are looking for ways to lower their prescription drug costs even if they have Part D coverage. But it is unclear whether the sites actually lower costs for beneficiaries; one study found that for individuals with Medicare, the sites did not result in lower out-of-pocket costs. Additionally, since any prescription purchased through these sites would not count toward the limit on Part D out-of-pocket expenses, beneficiaries could spend more out of pocket over a year by using these sites, even if individual prescriptions cost less. The balance of benefits and drawbacks may also change if the Inflation Reduction Act drug price negotiations result in Part D plans having better prices than the discount websites.

With about one of five beneficiaries using discount websites despite having Part D coverage, we need a better understanding of how well Part D plans are providing access to affordable drugs and if the discount websites can offer drugs at a lower cost. Confusion about the sites and lack of knowledge about Medicare rules could cause beneficiaries to drop their Part D coverage or fail to sign up for Part D. If beneficiaries believe these sites take the place of Part D coverage, they could end up paying more for the prescription drug coverage they need in the future. They also could be subject to paying a late-enrollment penalty if they enroll in Part D later. Beneficiaries need a better understanding of the benefits and trade-offs of using the discount sites and how to lower their prescription drug costs now while protecting themselves in the future.