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Take-Up of Medicare Part D and the SSA Subsidy: Early Results from the Health and Retirement Study

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  • Helen Levy

    (University of Michigan)

  • David Weir

    (University of Michigan)

Abstract

We analyze newly available data from the Health and Retirement Study on senior citizens’ take-up of Medicare Part D and the associated SSA Low-Income Subsidy. We find that economic factors ­ specifically, demand for prescription drugs ­ drove the decision to enroll in Part D. For the most part, individuals with employer-sponsored coverage in 2004 kept that coverage, as they should have. Individuals with no prescription drug coverage in 2004 mostly enrolled in Part D or obtained other coverage; many of those who remained without coverage reported that they do not use prescribed medicines. Take-up of the SSA "Extra Help" subsidy seems to have been more problematic, with many Part D beneficiaries unaware of the subsidy program or unsure about their eligibility. There is apparent under-reporting in the HRS of participation in the subsidy program, suggesting that some who profess to be unaware of the program may actually be participating in it. In terms of respondents’ subjective experiences of decision-making, the majority report having had little or no difficulty with the Part D enrollment decision and being confident that they made the right decision. Thus, for the most part, despite the complexity of the program, Medicare beneficiaries seem to have been able to make economically rational decisions in which they had confidence, although additional intervention for low-income beneficiaries may be desirable.

Suggested Citation

  • Helen Levy & David Weir, 2007. "Take-Up of Medicare Part D and the SSA Subsidy: Early Results from the Health and Retirement Study," Working Papers wp163, University of Michigan, Michigan Retirement Research Center.
  • Handle: RePEc:mrr:papers:wp163
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    File URL: http://www.mrrc.isr.umich.edu/publications/Papers/pdf/wp163.pdf
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    References listed on IDEAS

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    1. Todd E. Elder & Elizabeth T. Powers, 2004. "SSI for the Aged and the Problem of 'Take-Up'," Working Papers wp076, University of Michigan, Michigan Retirement Research Center.
    2. Janet Currie, 2004. "The Take Up of Social Benefits," NBER Working Papers 10488, National Bureau of Economic Research, Inc.
    3. Kathleen McGarry, 1996. "Factors Determining Participation of the Elderly in Supplemental Security Income," Journal of Human Resources, University of Wisconsin Press, vol. 31(2), pages 331-358.
    4. Blundell, Richard & Fry, Vanessa & Walker, Ian, 1987. "Modelling the Take-up of Means-tested Benefits: the Case of Housing Benefits in the United Kingdom," Economic Journal, Royal Economic Society, vol. 98(390), pages 58-74, Supplemen.
    5. Todd Elder & Elizabeth Powers, 2006. "Public Health Insurance and SSI Program Participation Among the Aged," Working Papers wp117, University of Michigan, Michigan Retirement Research Center.
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    Cited by:

    1. Jonathan D. Ketcham & Kosali Simon, 2008. "Medicare Part D's Effects on Elderly Drug Costs and Utilization," NBER Working Papers 14326, National Bureau of Economic Research, Inc.
    2. Claudio Lucarelli & Jeffrey Prince & Kosali Simon, 2012. "The Welfare Impact Of Reducing Choice In Medicare Part D: A Comparison Of Two Regulation Strategies," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 53(4), pages 1155-1177, November.

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