Prescription Drug Insurance Coverage, Drug Utilization, and Cost-Related Non-Adherence: Evidence from the Medicare Part D Expansion

31 Pages Posted: 28 Aug 2013

Date Written: October 2011

Abstract

This paper uses the substantial increase in prescription drug insurance coverage from the adoption of Part D to generate new estimates the impact of coverage on drug utilization and cost-related non-adherence. The analysis uses detailed panel data on the elderly before and after the implementation of Part D drawn from the 2005 and 2007 Prescription Drug Study (PDS), administered as a supplement to the Health and Retirement Study (HRS), a large nationally representative survey of Americans aged 50 and older. Fixed-effect estimates suggest that gaining coverage results in a 15 percent increase in utilization. These results are consistent with the lower end of estimates in the literature. Gaining coverage also is associated with a 20-50 percent reduction in the incidence of cost-related non-adherence. However, even among the uninsured, only a relatively small proportion of drugs (12 percent) are associated with episodes of cost-related non-adherence. So, these large reductions apply to a small slice of all drugs.

Suggested Citation

Engelhardt, Gary V., Prescription Drug Insurance Coverage, Drug Utilization, and Cost-Related Non-Adherence: Evidence from the Medicare Part D Expansion (October 2011). Available at SSRN: https://ssrn.com/abstract=2316946 or http://dx.doi.org/10.2139/ssrn.2316946

Gary V. Engelhardt (Contact Author)

Syracuse University ( email )

900 S. Crouse Avenue
Syracuse, NY 13244-2130
United States

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