American Economic Journal:
Economic Policy
ISSN 1945-7731 (Print) | ISSN 1945-774X (Online)
Medicare Part D and the Financial Protection of the Elderly
American Economic Journal: Economic Policy
vol. 3,
no. 4, November 2011
(pp. 77–102)
Abstract
We examine the impact of the expansion of public prescription-drug insurance coverage from Medicare Part D and find evidence of substantial crowd-out. Using the 2002-2007 waves of the Medical Expenditure Panel Survey, we estimate the extension of Part D benefits resulted in 75 percent crowd-out of both prescription-drug insurance coverage and expenditures of those 65 and older. Part D is associated with sizeable reductions in out-of-pocket spending, much of which has accrued to a small proportion of the elderly. On average, we estimate a welfare gain from Part D comparable to the deadweight cost of program financing. (JEL H51, I18, J14)Citation
Engelhardt, Gary V., and Jonathan Gruber. 2011. "Medicare Part D and the Financial Protection of the Elderly." American Economic Journal: Economic Policy, 3 (4): 77–102. DOI: 10.1257/pol.3.4.77Additional Materials
JEL Classification
- H51 National Government Expenditures and Health
- I18 Health: Government Policy; Regulation; Public Health
- J14 Economics of the Elderly; Economics of the Handicapped; Non-labor Market Discrimination
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