scholarly journals Consumer Inertia and Firm Pricing in the Medicare Part D Prescription Drug Insurance Exchange

2014 ◽  
Vol 6 (1) ◽  
pp. 38-64 ◽  
Author(s):  
Keith M. Marzilli Ericson
Keyword(s):  
Prescription Drug ◽  
Medicare Part D ◽  
Medicare Part ◽  
Regression Discontinuity Design ◽  
Part D ◽  
Drug Insurance ◽  
Plan Choice ◽  
Complete Set ◽  
Prescription Drug Insurance ◽  
Enrollment Data

I use the Medicare Part D prescription drug insurance market to examine the dynamics of firm interaction with consumers on an insurance exchange. Enrollment data show that consumers face switching frictions leading to inertia in plan choice, and a regression discontinuity design indicates initial defaults have persistent effects. In the absence of commitment to future prices, theory predicts firms respond to inertia by raising prices on existing enrollees, while introducing cheaper alternative plans. The complete set of enrollment and price data from 2006 through 2010 confirms this prediction: older plans have approximately 10 percent higher premiums than comparable new plans. (JEL G22, I13, I18, L11, L65)

scholarly journals Retirement Lock and Prescription Drug Insurance: Evidence from Medicare Part D

2020 ◽  
Vol 12 (1) ◽  
pp. 389-417
Author(s):  
Gal Wettstein
Keyword(s):  
Prescription Drug ◽  
Medicare Part D ◽  
Medicare Part ◽  
Full Time ◽  
Part D ◽  
Drug Insurance ◽  
Before And After ◽  
Time Work ◽  
Part Time ◽  
Prescription Drug Insurance

I examine whether lack of an individual market for prescription drug insurance causes individuals to delay retirement. Exploiting the 2006 introduction of Medicare Part D, which subsidized drug insurance for Americans over age 65, I use a triple-differences design that compares labor outcomes of individuals with retiree health insurance up to age 65 to those with insurance for life, before and after age 65, before and after 2006. I find that those with benefits only to age 65 decreased full-time work by 8.4 percentage points, of which 70 percent was due to transitions to part-time work. (JEL G22, H51, I13, I18, J14, J26)

scholarly journals Medicare Part D and the Financial Protection of the Elderly

2011 ◽  
Vol 3 (4) ◽  
pp. 77-102 ◽  
Author(s):  
Gary V Engelhardt ◽  
Jonathan Gruber
Keyword(s):  
Prescription Drug ◽  
Insurance Coverage ◽  
Medicare Part D ◽  
The Elderly ◽  
Medical Expenditure ◽  
Medicare Part ◽  
Part D ◽  
Drug Insurance ◽  
Crowd Out ◽  
Prescription Drug Insurance

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)

scholarly journals Choice Inconsistencies among the Elderly: Evidence from Plan Choice in the Medicare Part D Program

2011 ◽  
Vol 101 (4) ◽  
pp. 1180-1210 ◽  
Author(s):  
Jason Abaluck ◽  
Jonathan Gruber
Keyword(s):  
Prescription Drug ◽  
No Value ◽  
Medicare Part D ◽  
The Elderly ◽  
Medicare Part ◽  
Part D ◽  
Plan Choice ◽  
Choice Sets ◽  
Prescription Drug Plan ◽  
Financial Characteristics

We evaluate the choices of elders across their insurance options under the Medicare Part D Prescription Drug plan, using a unique dataset of prescription drug claims matched to information on the characteristics of choice sets. We document that elders place much more weight on plan premiums than on expected out-of-pocket costs; value plan financial characteristics beyond any impacts on their own financial expenses or risk; and place almost no value on variance-reducing aspects of plans. Partial equilibrium welfare analysis implies that welfare would have been 27 percent higher if patients had all chosen rationally. (JEL D12, I11, J14)

Sinking, Swimming, or Learning to Swim in Medicare Part D

2012 ◽  
Vol 102 (6) ◽  
pp. 2639-2673 ◽  
Author(s):  
Jonathan D Ketcham ◽  
Claudio Lucarelli ◽  
Eugenio J Miravete ◽  
M. Christopher Roebuck
Keyword(s):  
Panel Data ◽  
Prescription Drug ◽  
Real World ◽  
Senior Citizens ◽  
Medicare Part D ◽  
Medicare Part ◽  
Part D ◽  
Drug Insurance ◽  
Cognitive Limitations ◽  
Specific Effects

Under Medicare Part D, senior citizens choose prescription drug insurance offered by numerous private insurers. We examine nonpoor enrollees' actions in 2006 and 2007 using panel data. Our sample reduced overspending by $298 on average, with gains by 81 percent of them. The greatest improvements were by those who overspent most in 2006 and by those who switched plans. Decisions to switch depended on individuals' overspending in 2006 and on individual-specific effects of changes in their current plans. The oldest consumers and those initiating medications for Alzheimer's disease improved by more than average, suggesting that real-world institutions help overcome cognitive limitations. (JEL D14, G22, H51, I13, I18)

The effect of Medicare Part D on prescription drug composition and demand

2015 ◽  
Vol 42 (2) ◽  
pp. 170-185 ◽  
Author(s):  
David Zimmer
Keyword(s):  
Prescription Drug ◽  
Medicare Part D ◽  
Medicare Part ◽  
Part D ◽  
Content Type ◽  
The Us ◽  
Upper Respiratory ◽  
Nationally Representative ◽  
The Impact ◽  
Shed Light

Purpose – The US Medicare Modernization Act of 2003 introduced optional prescription drug coverage, beginning in 2006, widely known as Medicare Part D. This paper uses up-to-date nationally representative survey data to investigate the impact of Part D not only on drug spending and consumption, but also on the composition of drug consumption. The paper aims to discuss these issues. Design/methodology/approach – Specifically, the paper investigates whether Part D impacted the number of therapeutic classes for which drugs were prescribed, and also whether Part D lead to increased usage of drugs for specific medical conditions that typically receive drug-intensive therapies. Findings – In addition to confirming findings from previous studies, this paper shows that Part D increased the number of therapeutic classes to which seniors receive drugs by approximately four classes. Part D also lead to increased usage of drugs used to treat upper respiratory disease, hypertension, and diabetes. Originality/value – While mostly concurring with previous studies on the spending impacts of Part D, this paper is the first to shed light on other impacts of Part D, specifically with respect to its impact on therapeutic classes for which drugs are prescribed.

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