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The Impact of Medicare Part D on Out-of-Pocket Costs for Prescription Drugs, Medication Utilization, Health Resource Utilization, and Preference-Based Health Utility

Keywords: Medicare Part D; health care utilization; health outcomes; insurance; prescriptions

Objectives. To quantify the impact of Medicare Part D eligibility on medication utilization, emergency department use, hospitalization, and preference-based health utility among civilian noninstitutionalized Medicare beneficiaries.

Study Design. Difference-in-differences analyses were used to estimate the effects of Part D eligibility on health outcomes by comparing a 12-month period before and after Part D implementation using the Medical Expenditure Panel Survey. Models adjusted for sociodemographic characteristics and health status and compared Medicare beneficiaries aged 65 and older with near elderly aged 55– 63 years old.

Principal Findings. Five hundred and fifty-six elderly and 549 near elderly were included. After adjustment, Part D was associated with a U.S.$179.86 (p=.034) reduction in out-of-pocket costs and an increase of 2.05 prescriptions (p=.081) per patient year. The associations between Part D and emergency department use, hospitalizations, and preference-based health utility did not suggest cost offsets and were not statistically significant.

Conclusions. Although there was a substantial reduction in out-of-pocket costs and a moderate increase in medication utilization among Medicare beneficiaries during the first year after Part D, there was no evidence of improvement in emergency department use, hospitalizations, or preference-based health utility for those eligible for Part D during its first year of implementation.

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