Strategic Tier Design in Health Insurance: The Case of Medicare Part D

Léa Bignon, Alessandro Iaria and Laura Lasio

No 17937, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We study the role of tier design in Medicare Part D. In the period 2013-2017, plans expanded the number of tiers in their formularies from three/four to five and systematically shifted generics to higher tiers subject to higher cost sharing. The systematic tier upgrading caused significant increases in the out-of-pocket costs, up to six times for some generics. This resulted in additional average per-enrollee spending on generics of $76 in 2017, totalling $1.5 billion for the Part D population, and increased mortality by 5.4% due to reduced utilization of generics with documented mortality benefits.

Date: 2023-02
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP17937 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:17937

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP17937

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().