Title: |
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Persistence in Medicare Prescription Drug Expenditures by Treatment Class |
Description: |
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The passage of the Medicare Modernization Act (MMA) has focused the spotlight on stand-alone prescription drug insurance policies for Medicare beneficiaries. This raises the questions of how viable such a market would be and what risk adjustment methods would be needed to prevent adverse selection. It is well known that many of the medical conditions for which Medicare beneficiaries use prescriptions drugs are chronic in nature, such as heart disease, high cholesterol, high blood pressure, arthritis and others. The chronic nature of many prescription drugs suggests that without some risk adjustment methodology adverse selection would be a problem for the stability of the market over time. This paper examines the persistence of prescription drug expenditures among Medicare beneficiaries and the impact of drug treatment categories on predicting next year’s expenditures using the current year’s experience. Our models also control for a wide array of health status and socio-demographic characteristics. Two year panels from the 1996 through 2001 MEPS are pooled together. Unlike private prescription drug claims data sets, these data are representative of the entire non-institutionalized Medicare population. We pay particular attention to treatment categories that are associated with Medicare-Medicaid dual eligibles and other low-income and disabled Medicare beneficiaries. |
Author(s): |
|
Jessica Banthin, PhD and G. Edward Miller, PhD |
Agency: |
|
Rockville (MD): Agency for Healthcare Research and Quality |
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