What Effect Did Medicare Part D Have on SSDI Medicare Beneficiaries?

Medicare Part D expanded public prescription drug insurance coverage to millions of Social Security Disability Insurance (SSDI) Medicare beneficiaries. Using difference-in-differences estimation and data from the Medical Expenditure Panel Survey, I estimate the effect of Medicare Part D on the prescription drug coverage, utilization, and expenditures of this understudied group. I estimate that the policy increased prescription drug coverage by 18 percentage points and decreased annual out-of-pocket prescription drug expenditure by $526 (a decrease of 42 percent from the pre-reform mean). Additionally, the estimates suggest modest substitution away from private prescription drug coverage (decrease of 5.7 percentage points) and little decrease in annual private insurance prescription drug expenditure ($31). This would suggest large welfare gains from the policy for the Part D eligible SSDI population.