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This paper measures how cost-sharing impacts older low-income patients, exploiting a disconti-nuity in eligibility for a prescription drug subsidy for those who lose access to the Medicaid-linked program. Higher drug prices resulting from subsidy loss lead to a 40% reduction in prescription expenditures, driven by a 16% quantity reduction of prescriptions filled. Patients economize on purchases of higher-priced drugs, irrespective of their health benefits. For example, patients re-duce insulin purchases by 35%. There is no evidence that cost-sharing prompts switching from branded drugs to generics. This behavior suggests that cost-sharing reduces prescription accessibility without enhancing cost-effectiveness.
