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

Robert Kaestner, Cuping Schiman, G. Caleb Alexander

Research output: Contribution to journalArticlepeer-review

Abstract

We used Medicare administrative data (2002–2009) and an instrumental variables design that exploits the natural experiment created by the implementation of Medicare Part D to estimate the effect of prescription drug coverage insurance on the use and costs of inpatient services. We find that gaining prescription drug insurance through Part D caused approximately a 4 percent decrease in hospital admission rate, a 2–5 percent decrease in Medicare inpatient payments per person, and a 10–15 percent decrease in inpatient charges. Among specific types of admissions, gaining insurance was associated with significant decreases in admissions for CHF and COPD.

Original languageEnglish (US)
Pages (from-to)595-628
Number of pages34
JournalJournal of Risk and Insurance
Volume86
Issue number3
DOIs
StatePublished - 2019

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics

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