Has Medicare Part D reduced racial/ethnic disparities in prescription drug use and spending?

Abstract

Objective: To evaluate whether Medicare Part D has reduced racial/ethnic disparities in prescription drug utilization and spending.

Data: Nationally representative data on white, African American, and Hispanic Medicare seniors from the 2002-2009 Medical Expenditure Panel Survey are analyzed. Five measures are examined: filling any prescriptions during the year, the number of prescriptions filled, total annual prescription spending, annual out-of-pocket prescription spending, and average copay level.

Study design: We apply the Institute of Medicine's definition of a racial/ethnic disparity and adopt a difference-in-difference-in-differences (DDD) estimator using a multivariate regression framework. The treatment group consists of Medicare seniors, the comparison group, adults without Medicare aged 55-63 years.

Principal findings: Difference-in-difference-in-differences estimates suggest that for African Americans Part D increased the disparity in annual spending on prescription drugs by $258 (p=.011), yet had no effect on other measures of prescription drug disparities. For Hispanics, DDD estimates suggest that the program reduced the disparities in annual number of prescriptions filled, annual total and out-of-pocket spending on prescription drugs by 2.9 (p=.077), $282 (p=.019) and $143 (p<.001), respectively.

Conclusion: Medicare Part D had mixed effects. Although it reduced Hispanic/white disparities related to prescription drugs among seniors, it increased the African American/white disparity in total annual spending on prescription drugs.

Keywords: Medicare Part D; prescription drugs; racial/ethnic disparities; utilization and spending.

Figure 1

Counts of Individuals in the Treatment and Comparison Groups before and after Medicare Part D (Overall Total Sample of 45,463 Individuals).