Dataset Information

Prescription drug coverage and effects on drug expenditures among elderly Medicare beneficiaries.

ABSTRACT:

Objective

To identify determinants of drug coverage among elderly Medicare beneficiaries and to investigate the impact of drug coverage on drug expenditures with and without taking selection bias into account.

Data sources/study setting

The primary data were from the 2000 Medicare Current Beneficiary Survey (MCBS) Cost and Use file, linked to other data sources at the county or state-level that provided instrumental variables. Community-dwelling elderly Medicare beneficiaries who completed the survey were included in the study (N=7,525). A probit regression to predict the probability of having drug coverage and the effects of drug coverage on drug expenditures was estimated by a two-part model, assuming no correlation across equations. In addition, the discrete factor model estimated choice of drug coverage and expenditures for prescription drugs simultaneously to control for self-selection into drug coverage, allowing for correlation of error terms across equations.

Principal findings

Findings indicated that unobservable characteristics leading elderly Medicare beneficiaries to purchase drug coverage also lead them to have higher drug expenditures on conditional use (i.e., adverse selection), while the same unobservable factors do not influence their decisions whether to use any drugs. After controlling for potential selection bias, the probability of any drug use among persons with drug coverage use was 4.5 percent higher than among those without, and drug coverage led to an increase in drug expenditures of $308 among those who used prescription drugs.

Conclusions

Given significant adverse selection into drug coverage before the implementation of the Medicare Prescription Drug Improvement and Modernization Act, it is essential that selection effects be monitored as beneficiaries choose whether or not to enroll in this voluntary program.

SUBMITTER: Huh S

PROVIDER: S-EPMC2442248 | biostudies-literature | 2008 Jun

REPOSITORIES: biostudies-literature

ACCESS DATA

Publications

Prescription drug coverage and effects on drug expenditures among elderly Medicare beneficiaries.

Huh Soonim S Rice Thomas T Ettner Susan L SL

Health services research 20080601 3

<h4>Objective</h4>To identify determinants of drug coverage among elderly Medicare beneficiaries and to investigate the impact of drug coverage on drug expenditures with and without taking selection bias into account.<h4>Data sources/study setting</h4>The primary data were from the 2000 Medicare Current Beneficiary Survey (MCBS) Cost and Use file, linked to other data sources at the county or state-level that provided instrumental variables. Community-dwelling elderly Medicare beneficiaries who ...[more]

PMID: 18454769

Similar Datasets

Project description:BackgroundMedicare Part D prescription drug plans (PDPs) implemented in January 2006 are designed to improve beneficiaries' access to pharmaceuticals and use market competition to yield affordable drug costs. Variations in estimated PDP costs for beneficiaries living in different states have not previously been characterized.ObjectiveTo describe variations in the estimated costs of PDPs (plan premium, copays, and coinsurance) within and across states.DesignTo estimate PDP costs based on 4 actual patient cases that exemplify common conditions and prescription drug combinations for Medicare beneficiaries, we used the online tool provided by the Centers for Medicare and Medicaid Services.MeasurementsPrincipal study outcomes included (a) variation across states in the estimated annual cost of the lowest-cost PDP for each case and (b) variation in the estimated affordability of the lowest-cost PDPs across states, based on cost-of-living-adjusted median income for zero-earner households.ResultsFor all 4 patient cases, we found substantive within-state and between-state differences in the estimated costs of Medicare PDPs incurred by beneficiaries. The estimated annual costs to beneficiaries of the lowest-cost PDPs varied across states by as much as $320 for medications in the least expensive scenario, and by as much as $13,000 for the most expensive scenario. On average across states, a beneficiary with cost-of-living-adjusted median income would expect to spend 3%-28% of annual income to pay for medications in the lowest-cost PDPs in the 4 patient cases. The affordability of the lowest-cost plans varied across states, and for 2 of the 4 cases the lowest-cost PDP estimates were negatively correlated with cost-of-living-adjusted median income.ConclusionsSubstantive differences in estimated PDP costs are evident across states for patients with common Medicare conditions. Importantly, the lowest-cost plans were not proportionally affordable with respect to state-specific cost-of-living-adjusted median income. Refinement of the Medicare drug program may be needed to improve national balance in PDP affordability for beneficiaries living in different states.

Dataset Information

Prescription drug coverage and effects on drug expenditures among elderly Medicare beneficiaries.

Objective

Data sources/study setting

Principal findings

Conclusions

Publications

Prescription drug coverage and effects on drug expenditures among elderly Medicare beneficiaries.

Similar Datasets

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