Costs and Benefits of Elderly Prescription Drug Coverage: Evidence from Veterans’ Health Care
This study tests the impact of a public prescription benefit on Medicare-eligible veterans, utilizing a mid-1990s benefit change in the VA health care system. Using data from the Medicare Current Beneficiary Survey, I compare prescription spending and utilization, as well as use of other health services and health outcomes for veterans and non-veterans before and after the VA insurance change. Results show that receipt of a publicly-provided prescription benefit leads to an increase in spending on prescriptions, and simultaneously, a decrease in spending on other medical services. On average, every $1 increase in drug spending is associated with a $6.50 decrease in other medical spending, and this change is accompanied by measured improvements in the health of benefit recipients. The benefit appears to accrue mainly to low-income and disabled individuals who typically have higher-than-average medical expenses, and are also more likely to experience substantial welfare gains from the relative income increase associated with the reduction (to zero) in the price of prescription drugs.
|Date of creation:||Apr 2008|
|Date of revision:|
|Contact details of provider:|| Phone: (508)793-3362|
Fax: (508) 793-3708
Web page: http://www.holycross.edu/departments/economics/website/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Goldman Dana P & Joyce Geoffrey F & Malkin Jesse Dylan, 2002. "The Costs of A Medicare Prescription Drug Benefit," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 2(1), pages 1-18, April.
- Baoping Shang & Dana P. Goldman, 2007. "Prescription Drug Coverage and Elderly Medicare Spending," NBER Working Papers 13358, National Bureau of Economic Research, Inc.
- Nasreen Khan & Robert Kaestner & Swu Jane Lin, 2007. "Prescription Drug Insurance and Its Effect on Utilization and Health of the Elderly," NBER Working Papers 12848, National Bureau of Economic Research, Inc.
- Olga Kiuila & Peter Mieszkowski, 2007. "The effects of income, education and age on health," Health Economics, John Wiley & Sons, Ltd., vol. 16(8), pages 781-798.
- Tomas J. Philipson & Dana Goldman, 2007.
"Integrated Insurance Design in the Presence of Multiple Medical Technologies,"
American Economic Review,
American Economic Association, vol. 97(2), pages 427-432, May.
- Dana Goldman & Tomas Philipson, 2007. "Integrated Insurance Design in the Presence of Multiple Medical Technologies," NBER Working Papers 12870, National Bureau of Economic Research, Inc.
- Mark V. Pauly & Yuhui Zeng, 2004. "Adverse Selection and the Challenges to Stand-Alone Prescription Drug Insurance," NBER Chapters, in: Frontiers in Health Policy Research, Volume 7, pages 55-74 National Bureau of Economic Research, Inc.
- Lillard, L.A. & Rogowski, J. & Kington, R., 1999.
"Insurance Coverage for Prescription Drugs: Effects on Use and Expenditures in the Medicare Population,"
99-09, RAND - Labor and Population Program.
- Lee A. Lillard & Jeannette Rogowski & Raynard Kington, 1999. "Insurance Coverage for Prescription Drugs: Effects on Use and Expenditures in the Medicare Population," Working Papers 99-09, RAND Corporation.
- James J. Heckman & Hidehiko Ichimura & Petra E. Todd, 1997. "Matching As An Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Programme," Review of Economic Studies, Oxford University Press, vol. 64(4), pages 605-654.
- Richard Blundell & Monica Costa Dias, 2000. "Evaluation methods for non-experimental data," Fiscal Studies, Institute for Fiscal Studies, vol. 21(4), pages 427-468, January.
- Pauly Mark V. & Zeng Yuhui, 2004. "Adverse Selection and the Challenges to Stand-Alone Prescription Drug Insurance," Forum for Health Economics & Policy, De Gruyter, vol. 7(1), pages 1-22, January.
When requesting a correction, please mention this item's handle: RePEc:hcx:wpaper:0803. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Victor Matheson)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.