During covered hospital admissions, there are about 57 prescription drugs administered at the hospital that insurers will generally pay for. They are especially unwilling to provide coverage for off-label drugs unless those that have been documented as effective in one of three major medical compendia or in multiple published studies. The so called off-label use of prescription drugs is common in many branches of medicine, especially in the treatment of cancer. Nowadays, more prescriptions are written by outpatient services than inpatient facilities such as hospitals.
Generic drugs
Private insurers usually cover all drugs approved by the FDA. Many private insurers have created incentives for physicians and consumers to substitute generic drugs for branded drugs. They offered lower copayments for generic drugs than for branded drugs.
Full coverage is most common in HMOs. They could rely on treatment with generic drugs by coordinating directly with physicians. Some HMOs require that their pharmacies automatically substitute generic drugs (U.S. Department of Commerce, 1994. Op. cit.; Moore, 1996. Op. cit. 62 3-69) for branded drugs unless the physician explicitly instructs otherwise.
Copay
Still, very few health insurance plans cover 100 percent of prescription drug costs. Most plans impose some amounts of copayments to limit prescription drug use, generally in the range of $5 or less.
Still, very few health insurance plans cover 100 percent of prescription drug costs. Most plans impose some amounts of copayments to limit prescription drug use, generally in the range of $5 or less.
Direct mail-order
Another way for insurers to reduce drug costs is through volume discounts and direct mail-order for drugs that patients need refilled on a regular basis. This has become a common practice among insurers. The U.S. Department of Commerce cites reports from economic research firms and industry analysts suggesting that the formation of large buying groups under managed care programs has moderated prescription drug prices. Medicaid, the nation’s major public health insurer, has created a list of 62 incentives just to keep drug costs low.
Another way for insurers to reduce drug costs is through volume discounts and direct mail-order for drugs that patients need refilled on a regular basis. This has become a common practice among insurers. The U.S. Department of Commerce cites reports from economic research firms and industry analysts suggesting that the formation of large buying groups under managed care programs has moderated prescription drug prices. Medicaid, the nation’s major public health insurer, has created a list of 62 incentives just to keep drug costs low.
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