Date of Award
Spring 5-2-2025
Document Type
Thesis
Degree Name
Master of Arts (MA)
Department
Economics
First Advisor
Partha Deb
Second Advisor
Karna Basu
Academic Program Adviser
Kenneth McLaughlin
Abstract
The author examines how exposure to the Medicare Part D coverage gap affects future prescription drug use and whether the closure of the gap under the Affordable Care Act (ACA) altered beneficiary behavior. Using 2007–2019 MEPS data, the analysis compares Part D enrollees to similarly aged, privately insured individuals, producing first-differences and difference-in-differences estimates. Before the ACA, exposure to the gap was associated with 4.9 fewer prescription fills relative to comparable non-Part D individuals. After the ACA, the effect fell to a reduction of 2.2 generic fills, with no significant decline in branded use. Sudden out-of-pocket cost increases prompted sharp reductions in utilization, particularly for brand-name drugs. The ACA’s phased discounts attenuated this response. Difference-in-differences estimates confirm that, although the ACA reduced out-of-pocket costs, it did not significantly increase prescription utilization. The findings underscore the importance of cost structure design in health insurance and highlight drawbacks of nonlinear cost-sharing.
Recommended Citation
Urbatsch, Selene, "Behavioral Responses to the Medicare Part D Coverage Gap and Its Closure" (2025). CUNY Academic Works.
https://academicworks.cuny.edu/hc_sas_etds/1370
