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

Helen Levy and David Weir
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David Weir: University of Michigan

Working Papers from University of Michigan, Michigan Retirement Research Center

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.

Pages: 33 pages
Date: 2007-10
New Economics Papers: this item is included in nep-hea, nep-ias and nep-lab
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Citations: View citations in EconPapers (3)

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