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Prescription Drug Insurance and Its Effect on Utilization and Health of the Elderly

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  • Nasreen Khan
  • Robert Kaestner
  • Swu Jane Lin

Abstract

The Medicare Modernization Act was recently established, to provide limited drug coverage to the elderly. However, there is limited evidence on how drug coverage might affect health. The goal of this paper is to obtain “causal effects” of prescription drug coverage on drug use, use of other medical services and health of the elderly. We use fixed-effects analysis to control for unmeasured person-specific effects that may confound the relationships of interest. Results show prescription drug coverage, particularly public coverage, significantly increased the utilization of prescription drugs, but had no discernable effect on hospital admissions or health.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 12848.

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Date of creation: Jan 2007
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Handle: RePEc:nbr:nberwo:12848

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  1. Lillard, L.A. & Rogowski, J. & Kington, R., 1999. "Insurance Coverage for Prescription Drugs: Effects on Use and Expenditures in the Medicare Population," Papers, RAND - Labor and Population Program 99-09, RAND - Labor and Population Program.
  2. David M. Cutler & Richard J. Zeckhauser, 1999. "The Anatomy of Health Insurance," NBER Working Papers 7176, National Bureau of Economic Research, Inc.
  3. Mark G. Duggan, 2003. "Does Medicaid Pay Too Much for Prescription Drugs? A Case Study of Atypical Anti-Psychotics," NBER Working Papers 9626, National Bureau of Economic Research, Inc.
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Cited by:
  1. Munkin M & Trivedi P. K, 2009. "Incentives and Selection Effects of Drug Coverage on Total Drug Expenditure: a Finite Mixture Approach," Health, Econometrics and Data Group (HEDG) Working Papers, HEDG, c/o Department of Economics, University of York 09/22, HEDG, c/o Department of Economics, University of York.
  2. Boyd H. Gilman & Barbara Gage & Susan Haber & Sonja Hoover & Jyoti Aggarwal, 2007. "Impact of Drug Coverage on Medical Expenditures Among the Elderly," Mathematica Policy Research Reports, Mathematica Policy Research 5638, Mathematica Policy Research.
  3. Melissa Boyle, 2008. "Costs and Benefits of Elderly Prescription Drug Coverage: Evidence from Veterans’ Health Care," Working Papers, College of the Holy Cross, Department of Economics 0803, College of the Holy Cross, Department of Economics.

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