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Examining the Number of Competitors and the Cost of Medicare Part D: Working Paper 2014-04

Author

Listed:
  • Andrew Stocking
  • James Baumgardner
  • Melinda Buntin
  • Anna Cook

Abstract

Most beneficiaries of Medicare's Part D prescription drug insurance choose among private drug plans to receive their coverage. This paper is the first to examine the relationship between the number of competing plan sponsors and the cost of Part D during the program's first five years. Over the period from 2006 to 2010, regional Part D markets contained between 16 and 22 plan sponsors offering stand-alone plans. Consistent with economic theory, we find that increases in the number of plan sponsors within a market were associated with lower bids and lower overhead

Suggested Citation

  • Andrew Stocking & James Baumgardner & Melinda Buntin & Anna Cook, 2014. "Examining the Number of Competitors and the Cost of Medicare Part D: Working Paper 2014-04," Working Papers 45553, Congressional Budget Office.
  • Handle: RePEc:cbo:wpaper:45553
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    File URL: https://www.cbo.gov/sites/default/files/113th-congress-2013-2014/workingpaper/45553-PartD_1.pdf
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    References listed on IDEAS

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    2. Gaynor, Martin & Town, Robert J., 2011. "Competition in Health Care Markets," Handbook of Health Economics, Elsevier.
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    6. Andrew Stocking & James Baumgardner & Melinda Buntin & Anna Cook, 2014. "Assessing the Design of the Low-Income Subsidy Program in Medicare Part D: Working Paper 2014-07," Working Papers 49451, Congressional Budget Office.
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    Cited by:

    1. repec:bla:randje:v:48:y:2017:i:4:p:877-905 is not listed on IDEAS
    2. Kate Ho & Joseph Hogan & Fiona Scott Morton, 2017. "The impact of consumer inattention on insurer pricing in the Medicare Part D program," RAND Journal of Economics, RAND Corporation, vol. 48(4), pages 877-905, December.
    3. Andrew Stocking & James Baumgardner & Melinda Buntin & Anna Cook, 2014. "Assessing the Design of the Low-Income Subsidy Program in Medicare Part D: Working Paper 2014-07," Working Papers 49451, Congressional Budget Office.

    More about this item

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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