|Estimated Effects of Increased Coverage on Prescription Drug Expenditures among Seniors
|Access to prescription drugs is important to seniors with chronic conditions. In 2005,
approximately one-third of seniors lacked prescription drug coverage. To examine the potential
effects of gaining drug coverage, which many seniors achieved in 2006 with Medicare Part D,
we estimate the relationship of prescription drug coverage and drug expenditures. We use
econometric models and data from a nationally representative sample of elderly, noninstitutionalized
Medicare beneficiaries pooled for the years 2000—2003. Relative to no drug
coverage, coverage from Medicare HMOs or employer-based plans is associated with increased
prescription drug expenditures of approximately 15 and 20 percent respectively, and with a
marginal increase of approximately one unique drug purchased per year. Medicaid and
employer-based coverage are associated with greater purchases of newer analgesic agents.
Findings from this paper can be used to inform Part D benefit design and formularies.
|Merrile Sing and Edward Miller and Jessica S. Banthin
|Rockville (MD): Agency for Healthcare Research and Quality