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Sinking, Swimming, or Learning to Swim in Medicare Part D

  • Ketcham, Jonathan D.
  • Lucarelli, Claudio
  • Miravete, Eugenio J
  • Roebuck, M Christopher

Under Medicare Part D, senior citizens choose prescription drug insurance off red by numerous private insurers. We examine non-poor enrollees' actions in 2006 and 2007 using panel data. Our sample reduced overspending by $298 on average, with gains by 81% of them. The greatest improvements were by those who overspent most in 2006 and by those who switched plans. Decisions to switch depended on individuals' overspending in 2006 and on individual-specific effects of changes in their current plans. The oldest consumers and those initiating medications for Alzheimer's disease improved by more than average, suggesting that real-world institutions help overcome cognitive limitations.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 8585.

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Date of creation: Sep 2011
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Handle: RePEc:cpr:ceprdp:8585
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