7 Ways You Can Build An Emergency Prescription Medication Fund

No doubt, you or someone you know takes prescription medication. More than 66% of all American adults use prescription drugs – that’s over 131 million people!

Consider that 89% of those with arthritis and 98% of those with diabetes use prescription drugs.  The number of adults having both those conditions is increasing every year, as the population ages.  According to the World Health Organization, the number of those with diabetes has risen from 108 million people worldwide in 1980 to 442 million in 2014.

At the same time, the cost of prescriptions continues to increase at record rates.  According to a report published in January 2019, the cost of brand-name prescription drugs rose more than 9% a year, each year from 2008 to 2016, and injectable drugs increased more than 15% – injectables including insulin.  And between 2012 and 2016, the cost of insulin doubled.

For those with insurance or those on Medicare or Medicaid, the cost of prescriptions doesn’t immediately hit the pocketbook. According to a study done by the Kaiser Family Fund, in 2017, private health insurance, Medicare, and Medicaid took care of 82% of prescriptions, while consumers paid 14% of those costs in out-of-pocket payments.

But what if you lose your insurance?  What if you no longer have prescription coverage?  How will you pay for your medications if you are prescribed one that’s not covered by your insurance?

The solution: build your own emergency prescription fund (EPF) savings account.

Building Your Fund

Even for those who find saving difficult, creating and sustaining an emergency prescription fund isn’t as hard as it sounds.  Here are our top tips for making sure you have enough money in your fund to cover any emergency:

1. Set a monthly savings goal.  Figuring out how much you need to save depends on what types of medications you’re taking.  Talk with your pharmacist to see how much your prescriptions are costing in total – both what’s covered by your insurance and what you pay – each month.  Divide that by two and that’s how much you should save on a monthly basis. Setting a goal that’s half your annual cost will allow you time to work on getting insurance or other types of coverage.

2. Set up a separate savings account. Having a separate savings account allows you to dedicate the funds deposited just to that purpose.  If you mingle your EPF with your other savings, the risk of using the money for other things is high.  It also gives you the opportunity to earn interest on your deposits; it may not be a lot of money, but interest piles up and every cent counts when it comes to your EPF.

3. Change matters.  Take all your purchases and round them up to the nearest dollar.  Take those pennies and put them into your EPF. You’ll be surprised how quickly your fund will increase over a month, six months, and a year.  Think about how many purchases you make in a week and in a month. If each of those purchases allows you even a difference in 20 cents, you’ll grow your fund almost organically.

4. Put every extra penny into your savings. Find a quarter on the sidewalk – put it in savings.  Someone buys your old living room couch – into savings it goes.  Your grandmother gives you money for your birthday – that’ll take care of one prescription refill.  Any unexpected money you get should go into your emergency fund. It doesn’t take from your main income, and it allows you to build without pain.

5. Set up auto-deposit into your EPF savings account.  Most companies pay through automatic deposits into your bank account.  Talk to your Human Resources Department or the person responsible for payroll about changing your direct deposit to allow a certain amount of your paycheck to be directly deposited into your EPF.  Savings without even thinking about it.

6. Reduce expenses. 78% of Americans are living paycheck to paycheck. You may feel like you’ve cut your expenses to the bone, but there are still other ways to make sure you have money to put in savings by cutting out or reducing:

7. The morning coffee.  Think about how much you spend on your morning coffee; can you make coffee at home instead of buying it in the drive-through?

8. Dining out.  Almost without thinking about it, we pick the kids up from school and swing through a fast-food restaurant for a snack.  The amount of money spent on dining out at fast-food restaurants grew 62% between 2004 and 2018.  Buy bulk snacks for the kids; let them even help picking them out.  Then, stock your car with the snacks so you’re not tempted to pull in to that burger place on the way home. Take the money you would have spent on these things and pop it into your savings account.  You’ll be surprised how quickly those dollars add up.

9. Make RxSaver your first stop.  While you have prescription coverage, make use of RxSaver’s price comparison and discount coupons.  Drug prices can vary, depending on where the pharmacy is and which discounts are available. RxSaver connects you with the best coupons at your nearest pharmacies.  It doesn’t matter if you have coverage or not, RxSaver’s only goal is to save you money, regardless of your prescription coverage.

Saving money can be difficult, and if you currently have prescription coverage, it might seem as if setting up and funding an emergency prescription fund is unnecessary. But you never know what changes might happen overnight.  It’s important to always plan ahead in case of an emergency, especially when it comes to your health.