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. 2019 Apr 16;18(1):57.
doi: 10.1186/s12939-019-0955-9.

The impact of Medicare part D on income-related inequality in pharmaceutical expenditure

Natalie Carvalho  1 , Dennis Petrie  2   3 , Linkun Chen  2 , Joshua A Salomon  4 , Philip Clarke  2
Affiliations

The impact of Medicare part D on income-related inequality in pharmaceutical expenditure

Natalie Carvalho et al. Int J Equity Health. .

Abstract

Background: Income-related inequality measures such as the concentration index are often used to describe the unequal distribution of health, health care access, or expenditure in a single measure. This study demonstrates the use of such measures to evaluate the distributional impact of changes in health insurance coverage. We use the example of Medicare Part D in the United States, which increased access to prescription medications for Medicare beneficiaries from 2006.

Methods: Using pooled cross-sectional samples from the Medical Expenditure Panel Survey for 1997-2011, we estimated income-related inequality in drug expenditures over time using the concentration and generalised concentration indices. A difference-in-differences analysis investigated the change in inequality in drug expenditures, as measured using the concentration index and generalised concentration index, between the elderly (over 65 years) and near-elderly (54-63 years) pre- and post-implementation of Medicare Part D.

Results: Medicare Part D increased public drug expenditure while out-of-pocket and private spending fell. Public drug expenditures favoured the poor during all study periods, but the degree of pro-poorness declined in the years immediately following the implementation of Part D, with the poor gaining less than the rich in both relative and absolute terms. Part D also appeared to result in a fall in the pro-richness of private insurance drug expenditure in absolute terms but have minimal distributional impact on out-of-pocket expenditure. These effects appeared to be short lived, with a return to the prevailing trends in both concentration and generalised concentration indices several years following the start of Part D.

Conclusions: The implementation of Medicare Part D significantly reduced the degree of pro-poorness in public drug expenditure. The poor gained less of the increased public drug expenditure than the rich in both relative and absolute terms. This study demonstrates how income-related inequality measures can be used to estimate the impact of health system changes on inequalities in health expenditure and provides a guide for future evaluations.

Keywords: Concentration index; Health insurance, prescription drugs; Inequality; Medicare part D.

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Conflict of interest statement

Authors’ information

The findings and conclusions expressed in this paper are entirely those of the authors and should not be attributed to the institutions to which the authors are affiliated.

Ethics approval and consent to participate

This analysis used de-identified secondary data from the Medical Expenditures Panel Survey (MEPS), as such did not require additional ethics approval.

Consent for publication

Not applicable

Competing interests

The authors declare that they have no competing interests.

Publisher’s Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Figures

Fig. 1
Fig. 1
Weighted average drug expenditure per person. The dotted line indicates when Medicare Part D was implemented
Fig. 2
Fig. 2
Income-related inequality in public drug expenditure. Weighted statistics. Left panel plots the CI of public drug expenditure in each period. Right panel plots the GCI of public drug expenditure in each period. Error bars represent the 95% confidence intervals for each estimated value. The dotted line indicates when Medicare Part D was implemented
Fig. 3
Fig. 3
Concentration curve of public drug expenditure for under and over 65 s in the period pre-Medicare Part D (2003–05) and post-Medicare Part D (2006–08). The 45 degree line indicates line of perfect equality in public drug expenditures
See this image and copyright information in PMC

References

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