The Impact of Medicare Part D on Mortality and Financial Stability

Using the Health and Retirement Study Panel core files from 1996 to 2014, I analyze how Medicare Part D impacted access to prescription drug coverage by various demographic factors such as race, gender, and income. In Chapter 1, I find the highest take-up rates for those who were white, female, and with higher incomes. However, increases in coverage were high across the board, such that Medicare Part D also improved drug insurance coverage for those who were black, male, and with lower income. Thus, although Medicare Part D did increase prescription drug insurance coverage for seniors across the board, I also find potential for improvement in enrollment for difficult-to-reach groups.

Next, Chapter 2 examines the impact of Medicare Part D on mortality. Although I do not find an impact on the life expectancy of respondents as a whole, I do find a significant positive effect for black respondents, indicating that Medicare Part D may have mattered more for disadvantaged groups. The largest impact is for black men, who have an additional 9 percentage point chance of living to age 73 for an additional 8 years of coverage (significant at the 5% level). When looking only at cardiovascular mortality, which is more likely to be influenced by drug coverage, I find improvements in life expectancy for the total population, with stronger effects for minorities and men. Overall, my findings suggest that Medicare Part D did move the needle on its goal: to improve the health of those who, without government intervention, had the most difficulty paying for prescription drugs.

Chapter 3 looks at the impact of Medicare Part D prescription drug coverage on cost-related medication adherence, food insecurity, and finances among seniors. It would be reasonable to assume that Medicare Part D, which led to near-universal drug coverage among senior citizens, could allow seniors to shift money previously spent on drug expenditures to other areas. The strongest effect of Medicare Part D is on cost-related medication nonadherence, leading to a 21% decrease for an additional 8 years of Medicare Part D coverage. The impact is even stronger for the black male population (30%). I fail to reject the null hypothesis that Medicare Part D did not reduce food insecurity or household debt. Overall, Medicare Part D appears to have improved the financial stability of seniors.