The Medicare Part D Expansion and the Health of Older Americans

Gary V. Engelhardt (co-PI) with Jonathan Gruber, MIT

The Medicare Modernization Act of 2003, better known as the legislation that added the Part D prescription drug benefit to the Medicare program, expanded the costs of the Medicare program by over 10% to provide, for the first time, prescription drug coverage to enrollees. Our recent research (funded by the Social Security Administration in 2009) on the Part D expansion suggests that that it resulted in a substantial increase not just in Medicare/Medicaid spending on and utilization of prescription drugs, but also in prescription drug spending from all insurance sources for Medicare beneficiaries. A key consideration in determining the benefits from the expansion is the extent to which the overall increase in drug utilization was associated with improvements in elderly health. To address this, we propose to exploit rich new data sources on health and prescription drug utilization for older Americans in the Health and Retirement Study (HRS) and two sets of analyses.

In the first analysis, we use the core HRS data, which include detailed information on demographics, economic resources, a variety of measures of health status, employment, and health insurance coverage, as well as sources of prescription drug coverage up through 2008, measured both before and after the Part D expansion. To these core data, we match detailed information from the 2005 and 2007 HRS Prescription Drug Surveys, which provide detailed utilization information on individual drugs taken by respondents, as well as information on unfilled and partially filled prescriptions, both before and after the expansion. The combination of these data then allows us to examine both the broad impact of the Part D expansion on health outcomes in the core survey, as well as specific pathways through the drug-level data in the drug survey.

In the second analysis, we move from respondent-reported health measures to laboratory-based measures by examining the impacct of the substantial increase in statin use among the elderly associated with the Part D expansion on cholesterol levels measured in the 2006-2007 HRS Biomarker Data gathered from blood samples drawn from HRS respondents, and then examine subsequent changes in respondent broader well-being, functioning, and economic status in the 2008 (and eventually 2010) core surveys.