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VOLUME 43 | NUMBER 5 | OCTOBER 2008


Effect of Prescription Drug Coverage on Health of the Elderly

Objective. To estimate the effect of prescription drug insurance on health, as measured by self-reported poor health status, functional disability, and hospitalization among the elderly.

Data. Analyses are based on a nationally representative sample of noninstitutionalized elderly (=65 years of age) from the Medicare Current Beneficiary Survey (MCBS) for years 1992–2000.

Study Design. Estimates are obtained using multivariable regression models that control for observed characteristics and unmeasured person-specific effects (i.e., fixed effects).

Principal Findings. In general, prescription drug insurance was not associated with significant changes in self-reported health, functional disability, and hospitalization. The lone exception was for prescription drug coverage obtained through a Medicare HMO. In this case, prescription drug insurance decreased functional disability slightly. Among those elderly with chronic illness and older (71 years or more) elderly, prescription drug insurance was associated with slightly improved functional disability.

Conclusions. Findings suggest that prescription drug coverage had little effect on health or hospitalization for the general population of elderly, but may have some health benefits for chronically ill or older elderly.

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