The insurance effect on prescription drug expenditures among the elderly: findings from the 1997 Medical Expenditure Panel Survey.
BACKGROUND
Despite continuing debate over a prescription drug benefit for the Medicare program, there has been relatively little research estimating the potential cost of providing such a benefit.


OBJECTIVE
The objective of this study was to estimate the effect of prescription drug insurance on outpatient prescription drug expenditures among the elderly.


METHODS
We studied respondents aged > or =65 years to the 1997 Medical Expenditure Panel Survey, a representative survey of the U.S. noninstitutionalized population. Survey-weighted linear regression models were used to estimate the probability of any expenditures and total expenditures while controlling for sociodemographic characteristics, chronic conditions, and health status.


METHODS
We used prescription drug insurance status and outpatient prescription drug expenditures.


RESULTS
An estimated 34 million elderly people filled 630 million prescriptions in 1997. Thirty-seven percent did not have prescription drug insurance. Total prescription drug expenditures exceeded $23 billion. Persons without prescription drug insurance spent slightly less than $7 billion; those with insurance spent more than $16 billion. After controlling for health status, comorbidity, and demographic characteristics, prescription drug insurance increased expenditures by $183 per person. The marginal increase in total expenditures of extending the average observed benefit to those currently uninsured is $2.3 billion (95% confidence interval, $1.2-3.5 billion).


CONCLUSIONS
Proposals for a Medicare drug benefit provide high copayments to protect against insurance effects and to address uncertainty in cost estimates of the proposed benefit. By quantifying the insurance effect on expenditures among the elderly, the data reported here could reduce uncertainty in the budget estimation process.
Curtis
Lesley H
LH
Center for Clinical and Genetic Economics, Duke Clinical Research Institute, Duke University Medical Center, Durham, North Carolina, USA.
Law
Amy W
AW
Anstrom
Kevin J
KJ
Schulman
Kevin A
KA
D000368:Aged; D000369:Aged, 80 and over; D000704:Analysis of Variance; D016009:Chi-Square Distribution; D003365:Costs and Cost Analysis; D016527:Drug Costs / Q000706:statistics & numerical data*; D011307:Drug Prescriptions / Q000191:economics*; D005260:Female; D005102:Health Expenditures / Q000706:statistics & numerical data*; D006801:Humans; D007356:Insurance, Pharmaceutical Services / Q000706:statistics & numerical data*; D016014:Linear Models; D008297:Male; D006278:Medicare / Q000706:statistics & numerical data; D014481:United States