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

Author Info

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

Abstract

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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Keywords: Insurance Plan Switching; Overspending; Prescription Drugs;

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Find related papers by JEL classification:
  • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
  • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
  • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
  • I10 - Health, Education, and Welfare - - Health - - - General
  • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
  • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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