Using Matched Survey and Administrative Data to Estimate Eligibility for the Medicare Part D Low-Income Subsidy Program

Abstract

This article uses matched survey and administrative data to estimate, as of 2006, the size of the population eligible for the Low-Income Subsidy (LIS), which was designed to provide “extra help” with premiums, deductibles, and copayments for Medicare Part D beneficiaries with low income and limited assets. We employ individual-level data from the Survey of Income and Program Participation and the Health and Retirement Study to cover the potentially LIS-eligible noninstitutionalized and institutionalized populations of all ages. The survey data are matched to Social Security administrative data to improve on potentially error-ridden survey measures of income and program participation. Our baseline estimate, based on the matched data, is that about 12 million individuals were potentially eligible for the LIS as of 2006. A sensitivity analysis indicates that the use of administrative data has a relatively small effect on the estimates, but does suggest that measurement error is important to account for.

Keywords: Medicare Part D, Low-Income Subsidy, matched survey-administrative data

JEL Classification: C81, I38