Small Ball (Finance). . . Earning $160,000/yr. one minute at a time

In past posts, I’ve focused on concepts that will save you thousands of dollars per year.  Today, I’m going to talk about something that is decidedly “small ball”, but nevertheless will help you achieve our goal of “living beyond your means without debt”.

I recently bought a used car for my daughter (something I swore I would never do, but so much for youthful oaths!), which requires 91 octane premium gas.  Now, I hear you saying, “doesn’t that violate the idea of spending less and saving more?”.  Well, the idea is to live better, which isn’t the same as living as cheaply as possible.  So, yes, I bought her a premium car, because it was a much better value than a crappy econo-box that cost more money.

So, when my daughter expressed concern about the cost of gas, I started thinking about to lower that cost.  Of course, I told her about CostCo, where gas is typically 5¢-15¢ cheaper per gallon than neighboring stations.  I also told her about using a credit card that will save her 4% per gallon (CostCo American Express card).  So, right off the bat we are saving 20¢-35¢ per gallon or almost 10% per gallon.  Now, where we live in Florida, premium gas is 93 octane; the car only needs 91 octane.    Essentially, drivers like me are buying octane they don’t need.  The solution: combine 93 octane and 87 octane gas to get a 91 octane blend.  The blend is 2/3 93 octane and 1/3 97 octane (if you are interested, the math is: 93x + 87(1-x) = 91).  If your tank holds 20 gallons and your typical fill-up is 15 gallons, you simply put 10 gallons of 93 premium in your tank and then another 5 gallons of 87 regular and viola, you have made your own 91 octane blend.  Remember, I started talking about “small ball”.  Well, we substituted 5 gallons of 93 octane for 87 octane; in Florida, the average price differential is about 28¢.  I know that in many parts of the country, the difference is about 20¢, so I’ll use that.  Basically, we have saved about $1 . . . for less than one minute of work (I timed it!).  Again, remember “small ball” is today’s theme.  You may be saying, “$1, who cares”.  Well, think about this, $1 dollar a week is $50/year or a free $1,000 over twenty years.  More importantly, saving $1/minute = $60/hour (after-tax), which is the same as earning over $160,000 (pre-tax).  Now, I’ve earned more and I’ve earned less, but I don’t recall a time where I ever turned down an opportunity to earn incremental money at a rate of $160,000 per year.  So, there you have it, nothing dramatic, but an easy way to “make” money, $1 at a time (or, as I like to think about it, $160,000 at a time).


Meds for Less . . . Or How I Learned to Love (or at least not hate) Big Pharma

Meds for Less . . . Or How I Learned to Love (or at least not hate) Big Pharma

As a professional consultant (primarily CFO and strategy work), I have to buy my own health insurance. This insurance carries a large deductible. Not a big deal for (knock on wood) healthy me, but all of a sudden a big deal after adding my not-so-healthy kids.

Saving Money on Prescription Pharmaceuticals

So, I’m faced with paying literally hundreds of dollars for the kid’s prescriptions. There has to be a better way! Guess what, there is a better way. Most (so far 100% of those I tried) drug manufacturers offer a drug discount card that cuts the cost of high dollar drugs to $15-$25 per refill!

The Savings: A Case Study

Using insurance (which put a maximum charge of $50 per prescription) and drug discount cards, I was able to save $140 on several prescriptions in one month! In another scenario, where my annual deductible had not been met, I was faced with a $180 bill for Adderal. Guess what, the manufacturer offers a drug discount card knocking the cost down $120 (still a hefty $60)! An added bonus, in this case, is that $180 goes against meeting my deductible, while I only spent $60.

How to Get the Discounts

Simply type your drug name followed by coupon (e.g. Intuniv coupon) in your browser. You will be offered a number of choices. I suggest going directly to the manufacturer site. They will typically require you to fill out a questionnaire and in return provide an on-line coupon (which you print out), followed by a card mailed to you. The discount card is usually for the shorter of 12 months or the end of the calendar year. In the current political environment, the drug companies can be expected to continue the programs (at least into 2013). Sometimes you can even get a free 30 day supply of a drug with a new prescription (just call your doctor and ask for a new prescription).

In some cases, especially with very high dollar drugs, you may have to call a special number and speak with someone about your situation. You will very likely get relief if you have a high deductible (because the drug company will get big bucks in subsequent months after your deductible is met) and more moderate relief in other cases.

At the Pharmacy

Be sure you give your coupon or savings card to the pharmacist when presenting your prescription or refill. The savings will be applied after your insurance and will typically lower your co-pay to a floor (no less than $15 is typical). If you have great insurance and only pay $4 per prescription, you will not likely save much. However, if you don’t work for the government and/or a union (or have Medicare), you will likely save big bucks on your more expensive prescriptions. Of course, if you have a high deductible, your savings can be considerable.  Remember to mention your discount every month.  Often pharmacies will only run the primary insurance and neglect these “secondary coverage” savings.  It is a pain to get pharmacies to re-run drug purchases, do be sure you remind them when initiating the prescription.

Where to Go for Discounts (selected popular pharmaceuticals)

I have noted the sites for some popular prescription drugs below. This list is by no means comprehensive and manufacturers change their programs all the time.

Abilify ($100/savings & 30 day free):

Advair ($10/savings & 30 day free):

Crestor ($18/prescription):

Diovan ($25/prescription):

Extavia ($600/mo savings):

Intuniv ($15/prescription or $115 discount):

Lipitor ($4/prescription):

Nexium ($18/prescription):

Help from Pharmacies- Don’t Count On It

I have to give a big thumbs-down to the pharmacies. No a single pharmacist has ever suggested looking on-line for the discount card! I suspect a combination of ignorance and higher dispensing fees on larger sales (though I can’t say this with certainty).

Why Does Big Pharma “Help”?

Why do the drug companies go to the trouble of ripping us off, but giving us an “out”? There are three primary reasons. The first is, if your insurance company is willing to foot the bill, the drug companies make full, and very large profits. The second is, the pills literally cost pennies to make. Getting $15 per prescription is still extremely profitable for the patent holder. The third is PR; the drug companies are able to say that nobody is excluded from being able to afford necessary pharmaceuticals, because they are affordable through discount cards.

A Few Thoughts on Big Pharma

I have long had very mixed feelings about the big drag companies. On the one hand, the advances made in pharmaceuticals in recent years have been nothing short of incredible. High blood pressure, cholesterol and depression (not to mention erectile dysfunction and toe fungus) have all been made more manageable due to drugs that have come on the market in recent years. On the other hand, Big Pharma charges a crazy high price for these drugs, with crazy high profits to match. Obviously, when possible, using generics reduces the cost significantly, but that is not always possible. Big Pharma is a master at combing out with a slightly tweaked version just as its original product is going off patent (witness the rise in “extended release” formulas as a follow-on product). Further, you can see the triumph of Big Pharma’s lobbying dollars over any sort of common sense when a US citizen cannot legally or easily purchase drugs from reputable countries (Canada, Europe, Israel, etc.) where the same pills are sold for less (by the same companies). Or more dangerously in the “Obamacare” legislation where the support of Big Pharma was purchased in the more of minimal cuts to drug reimbursement (which logically should be a huge source of savings from any comprehensive health care program).

In Closing

This is another opportunity to, “Get Money for Nothing”,  If the manufacturers are willing to provide a deep discount on their products, in this case pharmaceuticals, it is foolish to not take full advantage of the savings.  In my case, I expect the savings to amount to several thousand dollars in 2012.