Medicare Part D and the Financial Protection of the Elderly

Gary Engelhardt and Jonathan Gruber

Working Papers, Center for Retirement Research at Boston College from Center for Retirement Research

Abstract: We examine the impact of the expansion of public prescription prescription-drug insurance coverage from Medicare Part D has had on the elderly and find evidence of substantial crowd-out. Using detailed data from the 2002-6 waves of the Medical Expenditure Panel Survey (MEPS), we estimate that the extension of Part D benefits resulted in 75% crowd-out of prescription drug insurance coverage and 33%-50% crowd-out of prescription drug expenditures of those 65 and older. Part D is associated with relatively small reductions in out-of-pocket spending. This suggests that the welfare gain from protecting the elderly from out-of-pocket spending risk through Part D has been small.

Pages: 48 pages
Date: 2009-10, Revised 2009-10
New Economics Papers: this item is included in nep-age, nep-hea, nep-ias and nep-ltv
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Persistent link: https://EconPapers.repec.org/RePEc:crr:crrwps:wp2009-24

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