| Congress created Medicare almost forty years ago and, it is now considering the expansion of the program by adding a prescription drug benefit. While researchers have analyzed the effect of Medicare beneficiaries having prescription drug coverage on pharmacy expenditures, few have studied the effect on total health care expenditures. This study hypothesized that those Medicare beneficiaries with prescription drug coverage would have better access to prescriptions, which would improve compliance with prescribed treatments and provide lower cost treatment options when compared to more invasive therapies. As a result, persons with prescription drug coverage would have lower overall health care health expenditures compared to persons without drug coverage.; The data for this study were extracted from the Medicare Current Beneficiary Survey for a two-year period—1996–1997. The sample included 4,848 noninstitutionalized, elderly (age 65 or older) Medicare beneficiaries. The Andersen health care expenditure model was used to determine the statistical control variables for the analysis. The two-part health expenditures model was used to analyze the association between having prescription drug coverage and total health expenditures in the initial year of the study. The cross lagged effects model was used to analyze change in total health expenditures based on having prescription drug coverage.; The results of the analysis suggest that having prescription drug coverage did not increase the likelihood that Medicare beneficiaries would use prescriptions. Among those that used prescriptions, however, prescription drug coverage was associated with higher pharmacy expenditures, and somewhat greater number of prescriptions. Having prescription drug coverage, however, was not related to overall total health expenditures in 1996, nor was it related to change in total health expenditures between 1996 and 1997. Among insurance subgroups, particularly Medicare Choice - Plus enrollees and Medicare supplement policy holders, there was some evidence that non-pharmacy related expenditures were decreased for those beneficiaries with prescription drug coverage. The increased pharmacy costs associated with drug coverage seem to have been somewhat offset by lower costs for non-pharmacy health care services.; In conclusion, Medicare beneficiaries without prescription drug coverage led to higher pharmacy expenditures, but the effect on total health expenditures were not significantly affected. |
