TY  - JOUR
AU  - Lakdawalla,Darius N.
AU  - Yin,Wesley
TI  - Insurers' Negotiating Leverage and the External Effects of Medicare Part D
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 16251
PY  - 2010
Y2  - August 2010
UR  - http://www.nber.org/papers/w16251
L1  - http://www.nber.org/papers/w16251.pdf
N1  - Author contact info:
Darius N. Lakdawalla
Schaeffer Center for Health Policy and Economics
University of Southern California
3335 S. Figueroa St, Unit A
Los Angeles, CA 90089-7273
Tel: 213/740-6012
E-Mail: dlakdawa@healthpolicy.usc.edu

Wesley Yin
Department of Economics
Boston University
270 Bay State Rd., Rm 501
Boston, MA 02215
Tel: 617-353-6150
E-Mail: wyin@bu.edu
AB  - Public financing of private health insurance may generate external effects beyond the subsidized population, by influencing the size and bargaining power of health insurers. We test for this external effect in the context of Medicare Part D. We analyze how Part D-related insurer size increases impacted retail drug prices negotiated by insurers for their non-Part D commercial market. On average, Part D lowered retail prices for commercial insureds by 5.8% to 8.5%. The cost-savings to the commercial market amount to $3bn per year, which approximates the total annual savings experienced by Part D beneficiaries who previously lacked drug coverage.
ER  -