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

41 Pages Posted: 31 Jan 2009 Last revised: 25 Aug 2010

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: January 2009

Abstract

We analyze data from the Health and Retirement Study on senior citizens' take-up of Medicare Part D. Take-up among those without drug coverage in 2004 was high; about fifty to sixty percent of this group have Part D coverage in 2006. Only seven percent of senior citizens lack drug coverage in 2006 compared with 24 percent in 2004. We find little circumstantial evidence that Part D crowded out private coverage in the short run, since the persistence of employer coverage was only slightly lower in 2004 -- 2006 than it was in 2002 -- 2004. We find that demand for prescription drugs is the most important determinant of the decision to enroll in Part D among those with no prior coverage. Many of those who remained without coverage in 2006 reported that they do not use prescribed medicines, and the majority had relatively low out-of-pocket spending. Thus, for the most part, Medicare beneficiaries seem to have been able to make economically rational decisions about Part D enrollment despite the complexity of the program. We also find that Part D erased socioeconomic gradients in drug coverage among the elderly.

Suggested Citation

Levy, Helen and Weir, David, Take-Up of Medicare Part D: Results from the Health and Retirement Study (January 2009). NBER Working Paper No. w14692, Available at SSRN: https://ssrn.com/abstract=1335717

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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