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Medicare Part D and its Effect on the Use of Prescription Drugs, Use of Other Health Care Services and Health of the Elderly

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  • Robert Kaestner
  • Nasreen Khan

Abstract

We examine the effect of gaining prescription drug insurance as a result of Medicare Part D on use of prescription drugs, use of other medical services, and health for a nationally representative sample of Medicare beneficiaries. Given the heightened importance of prescription drugs for those with chronic illness, we provide separate estimates for those in poorer health. We find that gaining prescription drug insurance through Medicare Part D was associated with a 70% increase in the number of annual prescriptions, but that obtaining prescription drug insurance is not significantly related to use of other health care services or health, as measured by functional status and self-reported health. Among those in poorer health, we find that gaining prescription drug insurance was associated with a 60% increase in the number of annual prescriptions, and is not significantly related to use of other services or health.

Suggested Citation

  • Robert Kaestner & Nasreen Khan, 2010. "Medicare Part D and its Effect on the Use of Prescription Drugs, Use of Other Health Care Services and Health of the Elderly," NBER Working Papers 16011, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:16011
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    References listed on IDEAS

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    1. Zhou Yang & Donna B. Gilleskie & Edward C. Norton, 2004. "Prescription Drugs, Medical Care, and Health Outcomes: A Model of Elderly Health Dynamics," NBER Working Papers 10964, National Bureau of Economic Research, Inc.
    2. Amitabh Chandra & Jonathan Gruber & Robin McKnight, 2007. "Patient Cost-Sharing, Hospitalization Offsets, and the Design of Optimal Health Insurance for the Elderly," NBER Working Papers 12972, National Bureau of Economic Research, Inc.
    3. Lillard, L.A. & Rogowski, J. & Kington, R., 1999. "Insurance Coverage for Prescription Drugs: Effects on Use and Expenditures in the Medicare Population," Papers 99-09, RAND - Labor and Population Program.
    4. Helen Levy & David R. Weir, 2010. "Take-up of Medicare Part D: Results From the Health and Retirement Study," The Journals of Gerontology: Series B, The Gerontological Society of America, vol. 65(4), pages 492-501.
    5. Lillard, L.A. & Rogowski, J. & Kington, R., 1999. "Insurance Coverage for Prescription Drugs: Effects on Use and Expenditures in the Medicare Population," Papers 99-09, RAND - Labor and Population Program.
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    Cited by:

    1. Padmaja Ayyagari & Daifeng He, 2017. "The Role of Medical Expenditure Risk in Portfolio Allocation Decisions," Health Economics, John Wiley & Sons, Ltd., vol. 26(11), pages 1447-1458, November.
    2. Astrid Kiil, 2012. "Does employment-based private health insurance increase the use of covered health care services? A matching estimator approach," International Journal of Health Economics and Management, Springer, vol. 12(1), pages 1-38, March.
    3. Dan Shane; & Pravin Trivedi;, 2012. "What Drives Differences in Health Care Demand? The Role of Health Insurance and Selection Bias," Health, Econometrics and Data Group (HEDG) Working Papers 12/09, HEDG, c/o Department of Economics, University of York.
    4. Chao Wang, 2012. "Mandatory Universal Drug Plan, Access to Health Care and Health: Evidence from Quebec, Canada," Department of Economics Working Papers 2012-14, McMaster University.
    5. Padmaja Ayyagari, 2016. "Prescription drug coverage and chronic pain," International Journal of Health Economics and Management, Springer, vol. 16(2), pages 189-200, June.
    6. Ayyagari, Padmaja & Shane, Dan M., 2015. "Does prescription drug coverage improve mental health? Evidence from Medicare Part D," Journal of Health Economics, Elsevier, vol. 41(C), pages 46-58.

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    More about this item

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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