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

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  • Gary V. Engelhardt

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

  • Gary V. Engelhardt, 2011. "Prescription Drug Insurance Coverage, Drug Utilization, and Cost-Related Non-Adherence: Evidence from the Medicare Part D Expansion," Working Papers, Center for Retirement Research at Boston College wp2011-19, Center for Retirement Research, revised Nov 2011.
    • Handle: RePEc:crr:crrwps:wp2011-19
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    File URL: http://crr.bc.edu/working-papers/prescription-drug-insurance-coverage-drug-utilization-and-cost-related-non-adherence-evidence-from-the-medicare-part-d-expansion/
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