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Effects of Prescription Drug Insurance on Hospitalization and Mortality: Evidence from Medicare Part D

Author

Listed:
  • Robert Kaestner
  • Cuiping Long
  • G. Caleb Alexander

Abstract

We examine whether obtaining prescription drug insurance through the Medicare Part D program affected hospital admissions, expenditures associated with those admissions, and mortality. We use a large, geographically diverse sample of Medicare beneficiaries and exploit the natural experiment of Medicare Part D to obtain estimates of the effect of prescription drug insurance on hospitalizations and mortality. Results indicate that obtaining prescription drug insurance through Medicare Part D was associated with an 8% decrease in the number of hospital admissions, a 7% decrease in Medicare expenditures, and a 12% decrease in total resource use. Gaining prescription drug insurance through Medicare Part D was not significantly associated with mortality.

Suggested Citation

  • Robert Kaestner & Cuiping Long & G. Caleb Alexander, 2014. "Effects of Prescription Drug Insurance on Hospitalization and Mortality: Evidence from Medicare Part D," NBER Working Papers 19948, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:19948
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    References listed on IDEAS

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    1. Gary V. Engelhardt & Jonathan Gruber, 2011. "Medicare Part D and the Financial Protection of the Elderly," American Economic Journal: Economic Policy, American Economic Association, vol. 3(4), pages 77-102, November.
    2. Amitabh Chandra & Jonathan Gruber & Robin McKnight, 2010. "Patient Cost-Sharing and Hospitalization Offsets in the Elderly," American Economic Review, American Economic Association, vol. 100(1), pages 193-213, March.
    3. 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.
    4. Helen Levy & David R. Weir, 2010. "Take-up of Medicare Part D: Results From the Health and Retirement Study," Journals of Gerontology: Series B, Gerontological Society of America, vol. 65(4), pages 492-501.
    5. Gaynor Martin & Li Jian & Vogt William B, 2007. "Substitution, Spending Offsets, and Prescription Drug Benefit Design," Forum for Health Economics & Policy, De Gruyter, vol. 10(2), pages 1-33, July.
    6. Robert Kaestner & Nasreen Khan, 2012. "Medicare Part D and Its Effect on the Use of Prescription Drugs and Use of Other Health Care Services of the Elderly," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 31(2), pages 253-279, March.
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    Citations

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    Cited by:

    1. Tianyan Hu & Sandra L. Decker & Shin-Yi Chou, 2014. "The Impact of Health Insurance Expansion on Physician Treatment Choice: Medicare Part D and Physician Prescribing," NBER Working Papers 20708, National Bureau of Economic Research, Inc.
    2. repec:wly:hlthec:v:26:y:2017:i:11:p:1447-1458 is not listed on IDEAS
    3. Ausmita Ghosh & Kosali Simon, 2015. "The Effect of Medicaid on Adult Hospitalizations: Evidence from Tennessee’s Medicaid Contraction," NBER Working Papers 21580, National Bureau of Economic Research, Inc.
    4. repec:kap:ijhcfe:v:17:y:2017:i:3:d:10.1007_s10754-017-9211-2 is not listed on IDEAS
    5. Ausmita Ghosh & Kosali Simon & Benjamin D. Sommers, 2017. "The Effect of State Medicaid Expansions on Prescription Drug Use: Evidence from the Affordable Care Act," NBER Working Papers 23044, National Bureau of Economic Research, Inc.
    6. repec:eee:jhecon:v:53:y:2017:i:c:p:17-37 is not listed on IDEAS
    7. Padmaja Ayyagari, 2016. "Prescription drug coverage and chronic pain," International Journal of Health Economics and Management, Springer, vol. 16(2), pages 189-200, June.
    8. Ayyagari, Padmaja & Shane, Dan M., 2015. "Does prescription drug coverage improve mental health? Evidence from Medicare Part D," Journal of Health Economics, Elsevier, vol. 41(C), pages 46-58.

    More about this item

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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