NCPA - National Center for Policy Analysis

Insurance Covers Drug Costs For Three-Quarters Of Americans

June 1, 2000

Private insurance has increasingly been picking up the bills for prescription medicines. Only about one-quarter of Americans' total drug costs are now paid out of pocket, experts report.

  • Today, government figures show, 77 percent of Americans under 65 have health insurance, either public or private, and 99 percent of those with insurance have some drug coverage.
  • As of 1970, only 8 percent of the nation's total drug costs were covered by insurance -- a figure which had risen to 20 percent by 1980, and 34 percent by 1990.
  • The proportion has risen steadily in the 1990s, to the point where half of all spending on prescription drugs was covered by private insurance last year.
  • Another 21 percent was paid with public money -- mostly for people in the military and those covered by Medicaid or veterans' programs.

The nation's per capita spending on prescription drugs has increased to more than $300 this year, compared to $26 in 1970.

The Department of Health and Human Services expects the fraction of drug costs paid out of pocket to keep dropping over the next 10 years, even if Medicare still excludes drug coverage.

Source: David E. Rosenbaum, "Health Insurance Provides Buffer to Rising Drug Prices for Most Americans," New York Times, June 1, 2000.


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