Effect of Prescription Drug Coverage on the Elderly's Use of Prescription Drugs

Abstract

This paper evaluates the effect of prescription drug insurance coverage on prescription drug use among the elderly. Estimates were obtained using multivariate regression and a fixed-effects (within-person) research design that controls for unmeasured person-specific effects that may confound the relationships of interest. Estimates showed prescription drug coverage was associated with a 4% to 10% increase in the utilization of prescription drugs, depending on the type and generosity of the coverage.