The effects of Medicare Part D: Evidence from administrative data
The future of the Medicare program poses one of the greatest policy challenges to the United States. This extraordinarily popular program has brought universal health insurance coverage to the elderly and others who would otherwise lack access to needed health services. The introduction of Medicare Part D — the prescription drug benefit — provides a singular opportunity to understand how competition can work in the Medicare program. The program successfully expanded drug coverage to about 90% of the Medicare population. However, serious questions remain about the complexity of plan choices and about how good the elderly are at making these choices. Other important research questions concern the effects of the introduction of (nearly) universal drug coverage on health care service utilization, and spillover effects of increased prescription drug advertising to non-Medicare populations. This session consists of three papers that use administrative claims data to answer these three questions and to draw lessons for competitive health insurance markets more generally.