The Effect of Medicare Part D on Prescription Drug Spending and Health Care Use: 6 Years of Follow-up, 2007-2012

Abstract

Background: Previous studies have shown that Medicare Part D was associated with a reduction in out-of-pocket expenditures for Medicare beneficiaries during the early years of its implementation (2006 and 2007). However, a question remains regarding the effect of Part D on out-of-pocket expenditures in the longer term.

Objective: To evaluate the effects of Part D on prescription drug expenditures and certain health care use for a longer time period using a large, nationally representative sample of Medicare beneficiaries.

Methods: Using Medical Expenditure Panel Survey (MEPS) data from 2000 through 2005 (pre-Part D period) and from 2007 through 2012 (Part D era), this study identified a cohort of elderly Medicare beneficiaries (treatment group) and a near-elderly non-Medicare population (control group). A difference-in-differences analysis was conducted to estimate the effect of Part D on prescription medication use and expenditures and outpatient visits. Propensity score weights and sampling weights were applied to obtain unbiased effect estimates accounting for complex survey designs.

Results: A total of 26,585 elderly Medicare beneficiaries and 20,688 near-elderly non-Medicare beneficiaries were identified. The introduction of Part D was associated with an adjusted average reduction of $105 in annual out-of-pocket spending on prescription drugs during the post-Part D period (2007 through 2012). The reduction in annual out-of-pocket spending ranged from $49 to $152 during the post-Part D period. No significant increase was found in total prescription expenditures or prescription medication use following the introduction of Part D nor were there significant changes in outpatient visits.

Conclusions: A continued reduction of Part D out-of-pocket drug expenditures was found each year from 2007 to 2012.

Disclosures: No funding has been received to conduct this study or prepare this manuscript. The authors have no conflicts of interest to declare. Study concept and design were primarily contributed by Park with assistance from Jung. Both authors contributed equally to data analysis and interpretation. The manuscript was written primarily by Park, with assistance from Jung, and revised primarily by Jung.