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Do Drug Plans Matter? Effects of Drug Plan Eligibility on Drug Use Among the Elderly, Social Assistance Recipients and the General Population

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  • Paul V. Grootendorst
  • Mitchell Levine

Abstract

The 1984 Canada Health Act does not require that the provinces subsidize prescription drugs. Many provinces do, however, provide categorical coverage to the elderly, social assistance recipients and others, although the generosity of coverage is highly variable. A system of parallel private insurance covers the non-elderly ineligible for social assistance. In this study, we assessed the socio- economic, health and demographic determinants of private drug insurance. We also assessed the effect of inter-provincial variations in drug insurance coverage for the elderly and low income on variations in drug insurance coverage for the elderly and low income on their drug use. In addition, using instrumental variables methods, we considered the effect of prescription drug insurance coverage status on drug use in the non-elderly population ineligible for social assistance. Consistent with the previous literature, we find that for most seniors and non-indigent, drug coverage has only minor effects on drug use. The drug use of social assistance recipients was, however, sensitive to even relatively modest copayments of $0-$6.

Suggested Citation

  • Paul V. Grootendorst & Mitchell Levine, 2002. "Do Drug Plans Matter? Effects of Drug Plan Eligibility on Drug Use Among the Elderly, Social Assistance Recipients and the General Population," Social and Economic Dimensions of an Aging Population Research Papers 73, McMaster University.
    • Handle: RePEc:mcm:sedapp:73
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    Cited by:

    1. Filippini, M. & Masiero, G. & Moschetti, K., 2009. "Regional consumption of antibiotics: A demand system approach," Economic Modelling, Elsevier, vol. 26(6), pages 1389-1397, November.
    2. Marin C. Gemmill & Joan Costa‐Font & Alistair McGuire, 2007. "In search of a corrected prescription drug Elasticity estimate: a meta‐regression approach," Health Economics, John Wiley & Sons, Ltd., vol. 16(6), pages 627-643, June.
    3. Alan, Sule & Crossley, Thomas F. & Grootendorst, Paul & Veall, Michael R., 2002. "The effects of drug subsidies on out-of-pocket prescription drug expenditures by seniors: regional evidence from Canada," Journal of Health Economics, Elsevier, vol. 21(5), pages 805-826, September.
    4. Cristina Hernández-Izquierdo & Beatriz González López-Valcárcel & Stephen Morris & Mariya Melnychuk & Ignacio Abásolo Alessón, 2019. "The effect of a change in co-payment on prescription drug demand in a National Health System: The case of 15 drug families by price elasticity of demand," PLOS ONE, Public Library of Science, vol. 14(3), pages 1-39, March.
    5. Paul V. Grootendorst & Michael R. Veall, 2005. "National Catastrophic Drug Insurance Revisited: Who Would Benefit from Senator Kirby's Recommendations?," Canadian Public Policy, University of Toronto Press, vol. 31(4), pages 341-358, December.
    6. M. Fasihul Alam & David Cohen & Frank Dunstan & Dyfrig Hughes & Philip Routledge, 2018. "Impact of the phased abolition of co‐payments on the utilisation of selected prescription medicines in Wales," Health Economics, John Wiley & Sons, Ltd., vol. 27(1), pages 236-243, January.
    7. Astrid Kiil & Kurt Houlberg, 2014. "How does copayment for health care services affect demand, health and redistribution? A systematic review of the empirical evidence from 1990 to 2011," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 15(8), pages 813-828, November.

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    More about this item

    Keywords

    prescription drug utilization; copayments; user fees; pharmaceutical cost control;
    All these keywords.

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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