The Effects of Drug Subsidies on Out-of Pocket Prescription Drug Expenditures by Seniors: Regional Evidence from Canada

Thomas F. Crossley, Paul Grootendorst (), Sule Korkmaz and Michael R. Veall ()

Social and Economic Dimensions of an Aging Population Research Papers from McMaster University

Abstract: Between 1970 and 1986 all Canadian provinces introduced some version of a prescription drug subsidy for those age 65 or over and since 1986, all the provinces have increased copayments or deductibles to some degree. Employing a first-order approximation to the welfare gains from a subsidy, we find evidence that these subsidies have been less redistributive than an absolute per household cash transfer but slightly more redistributive than a transfer that would increase each household's income by the same percentage. Such evidence may have relevance for predicting the redistributive effects of a potential national prescription drug plan for seniors in the United States.

Keywords: prescription drug subsidies; incidence; redistribution; progressivity (search for similar items in EconPapers)
JEL-codes: I18 H23 (search for similar items in EconPapers)
Date: 2000-04
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Related works:
Journal Article: The effects of drug subsidies on out-of-pocket prescription drug expenditures by seniors: regional evidence from Canada (2002)
Working Paper: The Effects of Drug Subsidies on Out-of-Poket Prescription Drug Expenditures by seniors: regional Evidence from Canada (2000)
Working Paper: The Effects of Drug Subsidies on Out-of Pocket Prescription Drug Expenditures by Seniors: Regional Evidence from Canada (2000)
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