This study examines the association between types of prescription drug insurance coverage and the unit cost of dispensed drugs. Logistic regression and ordinary least squares regression were used to assess differences in the use of brand name and generic drugs and the unit cost of dispensed brand name or generic drugs across four insurance categories: Medicaid, private third party, indemnity, and uninsured. The results show that private third-party and indemnity prescriptions were more likely to be dispensed with brand name drugs. Also, indemnity patients and the uninsured were dispensed brand name and generic drugs with lower unit costs. The findings have ramifications for the design of prescription drug insurance benefits and suggest that physicians may respond to the economic situation of their patients when prescribing drugs.