Take-Up of Medicare Part D and the SSA Subsidy: Early Results from the Health and Retirement Study

33 Pages Posted: 22 Feb 2008

See all articles by Helen Levy

Helen Levy

University of Michigan at Ann Arbor - Institute for Social Research (ISR); National Bureau of Economic Research (NBER)

David Weir

University of Michigan at Ann Arbor - Institute for Social Research (ISR)

Date Written: October 2007

Abstract

We analyze newly available data from the Health and Retirement Study on senior citizens' take-up of Medicare Part D and the associated SSA Low-Income Subsidy. We find that economic factors - specifically, demand for prescription drugs - drove the decision to enroll in Part D. For the most part, individuals with employer-sponsored coverage in 2004 kept that coverage, as they should have. Individuals with no prescription drug coverage in 2004 mostly enrolled in Part D or obtained other coverage; many of those who remained without coverage reported that they do not use prescribed medicines. Take-up of the SSA Extra Help subsidy seems to have been more problematic, with many Part D beneficiaries unaware of the subsidy program or unsure about their eligibility. There is apparent under-reporting in the HRS of participation in the subsidy program, suggesting that some who profess to be unaware of the program may actually be participating in it. In terms of respondents' subjective experiences of decision-making, the majority report having had little or no difficulty with the Part D enrollment decision and being confident that they made the right decision. Thus, for the most part, despite the complexity of the program, Medicare beneficiaries seem to have been able to make economically rational decisions in which they had confidence, although additional intervention for low-income beneficiaries may be desirable.

Suggested Citation

Levy, Helen and Weir, David, Take-Up of Medicare Part D and the SSA Subsidy: Early Results from the Health and Retirement Study (October 2007). Michigan Retirement Research Center Research Paper No. WP 2007-163, Available at SSRN: https://ssrn.com/abstract=1082832 or http://dx.doi.org/10.2139/ssrn.1082832

Helen Levy (Contact Author)

University of Michigan at Ann Arbor - Institute for Social Research (ISR) ( email )

Ann Arbor, MI 48106-1248
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

David Weir

University of Michigan at Ann Arbor - Institute for Social Research (ISR) ( email )

Ann Arbor, MI 48106-1248
United States

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