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February 1991, Vol. 114, No. 2
Cathy Baker and Natalie Kramer
M edications can come in many forms, from over-the-counter pain killers and stomach soothers, to prescription drugs. As expected, most medical care plans treat medications differently, typically providing no coverage for home remedies, limited coverage for over-the-counter products, and the most comprehensive coverage for most prescription drugs. Typically, prescription drugs (as well as over-the-counter medications) provided to patients in a hospital are covered as part of a medical plan's hospital room and board benefits.1 Outpatient prescription drugs are also covered by most medical care plans. This article examines outpatient prescription drug coverage available through employer-provided medical care plans.
This article is based on data from the Bureau of Labor Statistics 1989 survey of benefits for full-time employees in medium and large firms. The survey provides data for 32 million employees. Data represent benefit provisions for workers in about 109,000 establishments employing 100 workers or more in private nonfarm industries.2
There is considerable interest in medical care plan coverage for outpatient prescription drugs, prompted by increasing drug prices and a variety of new drugs. Data on drug manufacturing and pricing are discussed in the first part of this article, followed by a look at how medical plans cover prescription drug benefits.
This excerpt is from an article published in the February 1991 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.
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1 In hospital prescription medications are normally covered as a part of hospital miscellaneous charges, which include general nursing care, medical supplies and surgical dressings, and other ancillary charges.
2 In addition to medical care benefits, the BLS Employee Benefits survey provides data on life and disability insurance, retirement and capital accumulation plans, paid and unpaid leave, and other benefits. The results of the survey are available in Employee Benefits in Medium and Large Firms, 1989, Bulletin 2363 (Bureau of Labor Statistics, 1990). Benefits data for State and local governments are available in Employee Benefits in State and Local Government, 1987, Bulletin 2309 (Bureau of Labor Statistics, 1988). Data were tabulated for all workers and separately for three occupational groups: professional and administrative, technical and clerical, and production and service workers. Data for this article are not presented for other occupational groups because no significant differences were found.
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