Drug Benefits in Health Insurance

Abstract

Benefits for drugs are becoming an integral component of health insurance plans in the United States, with 52.1 per cent of the population carrying some form of coverage for drugs by 1971. This paper describes the basic features of several plans currently being offered in the United States and Canada, and evaluates the various methods of administering them, including rationale for specifying benefits, and methods of reimbursement, cost-control, and distribution. Financing of drug costs through insurance should permit additional control of quality and utilization, although the correlation of drug use with total patient diagnosis and medical care for purposes of reviewing and improving utilization is impeded by the wide variation in compliance found among the population. Some mechanisms for controlling utilization include limiting quantities and refills, requiring copayments by the patient, prescribing generically, and influencing physicians to prescribe less frequently. Provisions for drug benefits in a recently proposed national health insurance scheme are briefly discussed.