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Kids and Health Care: Prescription Drugs

Getting your kids to the doctor or dentist is part of the health care equation. Taking them to the emergency room or hospital is another. Getting them the right medicine is yet another.

Prescription drugs are a huge deal for senior citizens, who often need a battery of drugs on an ongoing basis to maintain fragile health. Kids tend to need prescription drugs for shorter periods of time, to accomplish more specific results. But that doesn't relieve parents of the essential question: Who pays for your kids' prescription drugs?

The basic types of prescription drug plan include: open panel, closed panel, mail order and prescription drug card plans.

As we've noted before, if you have traditional indemnity insurance, the policy will usually cover prescription drugs generously. Indemnity plans usually offer open panel plans -- which allow you to fill any legitimate prescription at any pharmacy. It won't require that the pharmacy give you generic drugs if they're available; it will give the widest discretion to the doctor's judgment.

Most managed care plans cover prescription drugs -- with certain restrictions related to the type of drug and specific pharmacy that fills it. These are often called closed panel plans: They leave fewer options to the doctor's judgment and your preference.

In some cases, managed care plans will require that members place prescription drug orders through mail order pharmacies. These plans are the best cost control for the managed care company, in part because they channel many orders through a single location (or a few). In some cases, the managed care company actually owns the mail order pharmacy; in others, it simply makes a good contract in exchange for a lot of business.

Open panel and closed panel drug plans usually require some form of copayment or deductible. An open panel plan may require more of you, out of pocket -- sometimes 20 percent of the total. A closed panel or mail order plan will usually require less, a fixed amount of $5 or $10 per prescription.

Medicaid and state CHIPs usually cover drug costs in the same way that managed care plans do.

The main restrictions that these plans put on prescription drugs don't really apply to kids. (They limit drug coverage to prescriptions that are for treatment of an illness or injury covered by the plan -- they don't cover things like contraceptive prescriptions or the nicotine chewing gum that helps you quit smoking.)

A few insurance plans for kids don't cover prescription drugs. If you have one of these (or you don't have any insurance -- even a state CHIP), you can join a prescription buying plan.

Prescription drug buying plans are like vision plans. When you join, you get discounts on prescriptions when you buy from participating pharmacies. The plans usually include most major drug store chains. Discounts range from 5 percent to 50 percent on most drugs. (And they may be even higher if you order drugs through affiliated mail-order programs.)

One added plus: Prescription drug buying plans usually also have discounts for non-prescription, over-the-counter drugs.

Still, the discounts offered by drug buying plans aren't as good for the buyer as the open or closed panel plans. Most people who have health insurance don't need prescription drug plans -- unless they have an extremely high deductible on a catastrophic coverage plan or MSA. In some cases, if your child has a chronic disease or permanent disability and you spend a lot of money on non-prescription drugs, the drug plans may also make sense.

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