Medicare Part D and the Financial Protection of the Elderly
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Gruber_Medicare Part.pdf
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771.82 KB
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Author(s)
Engelhardt, Gary V.
Gruber, Jonathan
Date Issued
November 2011
Journal
American Economic Review
Publisher
American Economic Association
Citation
Engelhardt, Gary V, and Jonathan Gruber. “Medicare Part D and the Financial Protection of the Elderly.” American Economic Journal: Economic Policy 3.4 (2011): 77–102. © 2011 AEA
Version
Final published version
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)
MIT Department
Massachusetts Institute of Technology. Department of Economics
Terms of Use
Article is made available in accordance with the publisher's policy and may be subject to US copyright law. Please refer to the publisher's site for terms of use.
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DOI of Published Version
https://doi.org/10.1257/pol.3.4.77
