Effects of Prescription Drug Insurance on Hospitalization and Mortality: Evidence from Medicare Part D

Robert Kaestner, Cuiping Long, G. Caleb Alexander

NBER Working Paper No. 19948
Issued in February 2014
NBER Program(s):   HE

We examine whether obtaining prescription drug insurance through the Medicare Part D program affected hospital admissions, expenditures associated with those admissions, and mortality. We use a large, geographically diverse sample of Medicare beneficiaries and exploit the natural experiment of Medicare Part D to obtain estimates of the effect of prescription drug insurance on hospitalizations and mortality. Results indicate that obtaining prescription drug insurance through Medicare Part D was associated with an 8% decrease in the number of hospital admissions, a 7% decrease in Medicare expenditures, and a 12% decrease in total resource use. Gaining prescription drug insurance through Medicare Part D was not significantly associated with mortality.

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Document Object Identifier (DOI): 10.3386/w19948

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