If you’re like us, your health insurance coverage includes a prescription drug benefit. The benefit isn’t free, but you’re willing to pay for it because it saves you money every time you have a prescription filled. You are responsible for your co-pay, and your insurer pays the rest.

At least, that’s how it is supposed to work. But the truth is that your insurer often pays nothing. Your co-pay is all the pharmacy receives. Not only that, but your co-pay often exceeds the amount that someone without insurance would have paid for the drug. That’s right: People who don’t have insurance are paying less than you are for the same drug.

In 2017, Texas passed legislation banning this practice for health insurance contracts issued or renewed after January 1, 2018. Presumably, the legislature acted because lots of Texans were overpaying for drugs. How many? Until recently, no one really knew.

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But researchers at USC’s Schaeffer Center for Health Policy & Economics just filled in these blanks, and the numbers are big. They found that overpayments occurred on 23 percent of all prescription drug sales. The overpayment rate for generic drugs (28 percent) was substantially higher. And for the twenty most popular prescription drugs in the study, nine had overpayments more than 40 percent of the time. For the sleep-aid Ambien, the overpayment rate was 60.5 percent. For Norvasc (for patients with high blood pressure) the overpayment rate was 59.8 percent.

The scam works by taking advantage of consumers’ naive belief that their insurers are watching out for them. Suppose you have high blood pressure and your doctor prescribes amlodipine, a medication used by millions. If you have insurance, you probably think your insurer negotiated a great deal because a month’s supply at the pharmacy costs you only $10. But if you paid cash for the same drug at Costco, you’d have to pay only $1.85. Over a full year, you’d save $90 by not using your insurance.

The extra dollars that insured customers shell out usually don’t stay with pharmacies. They wind up in the hands of the pharmacy benefit managers (PBMs) that insurers hire to handle their subscribers’ prescription drug claims. These “rebates” are known as “clawbacks” in the trade.

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In our example involving amlodipine, the clawback would have been about $8. That’s just below the average overpayment per drug prescription of $7.69 in the USC study. That may not seem like a lot — you might pay that much or more for dinner at Pizza Hut. But the dollars pile up quickly when you consider the number of prescriptions that are covered by insurance. If the USC findings are representative, clawbacks will cost insured consumers about $2 billion this year.

Bills have been introduced into Congress to eliminate clawbacks, so far without success. Some pharmacists have tried to tell customers they can save money by cash too — causing some PBMs to insert “gag clauses” into their contracts. Eight states (including Texas) have enacted legislation authorizing pharmacists to tell their patients that their drugs would be cheaper if they just paid cash and/or prohibiting clawbacks. But Texas pharmacists complain that the practice still goes on.

Prohibiting gag clauses might make politicians feel better, but it won’t fix the problem. The real problem is that insurance is a terrible way of paying for things that we can and should pay for directly. Price-gouging does not happen with drugs that are sold over-the-counter at retail outlets like CVS, Costco or Wal-Mart. Those prices are transparent and easy to compare. When people pay directly for drugs, there are no hidden transfers between pharmacies and PBMs either. Competition does for cash customers what PBMs and pharmacies don’t seem able to do for one in four of the prescriptions filled by insured customers — reduce drug prices to the lowest sustainable level.

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Overcharges occur throughout the rest of our health care system too, and they drive up the cost of all sorts of procedures. Why? Because insurers don’t care about costs nearly as much as patients do. If we want to get health care spending under control, we should pay for it directly as often as we can.

As a consumer, you can protect yourself from overpaying by asking the pharmacist how much a drug would cost if you paid for it in cash. Then, pick the cheaper option. That approach works for every other consumer good. It will work for health care.

Silver is a law professor at the University of Texas at Austin. Hyman is an Adjunct Scholar at the Cato Institute and a professor at the Georgetown University Law Center. Their upcoming book, “Overcharged: Why Americans Pay Too Much for Health Care,” will be released this summer.