Nothing Special   »   [go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/eee/jhecon/v63y2019icp64-80.html
   My bibliography  Save this article

The Effect of Health Insurance on Prescription Drug Use Among Low-Income Adults:Evidence from Recent Medicaid Expansions

Author

Listed:
  • Ghosh, Ausmita
  • Simon, Kosali
  • Sommers, Benjamin D.
Abstract
This study examines how subsidized coverage affects prescription drug utilization among low-income non-elderly adults. Using the Affordable Care Act’s Medicaid expansions as a source of variation and a national, all-payer pharmacy transactions database, we find that within the first 15 months of new health insurance availability, aggregate Medicaid-paid prescriptions increased 19 percent, amounting to nearly 9 new prescriptions a year, per new enrollee. We find no evidence of reductions in uninsured or privately-insured prescriptions, suggesting that new coverage did not simply substitute for other payment sources. The largest increases occurred for medications treating conditions such as diabetes and heart disease, suggesting greater price elasticity for chronic medications. Generics increased more than brand-name drugs; and utilization increased less in expansion states with higher Medicaid drug copayments. Overall, these findings suggest that prescription drug demand among low-income populations exhibits substantial price sensitivity, and insurance expansion can increase medication treatment for chronic conditions.

Suggested Citation

  • Ghosh, Ausmita & Simon, Kosali & Sommers, Benjamin D., 2019. "The Effect of Health Insurance on Prescription Drug Use Among Low-Income Adults:Evidence from Recent Medicaid Expansions," Journal of Health Economics, Elsevier, vol. 63(C), pages 64-80.
    • Handle: RePEc:eee:jhecon:v:63:y:2019:i:c:p:64-80
    DOI: 10.1016/j.jhealeco.2018.11.002
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0167629617300206
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jhealeco.2018.11.002?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Robert Kaestner & Bowen Garrett & Jiajia Chen & Anuj Gangopadhyaya & Caitlyn Fleming, 2017. "Effects of ACA Medicaid Expansions on Health Insurance Coverage and Labor Supply," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 36(3), pages 608-642, June.
    2. Dillender, Marcus, 2015. "The effect of health insurance on workers’ compensation filing: Evidence from the affordable care act's age-based threshold for dependent coverage," Journal of Health Economics, Elsevier, vol. 43(C), pages 204-228.
    3. Mark Duggan & Fiona Scott Morton, 2010. "The Effect of Medicare Part D on Pharmaceutical Prices and Utilization," American Economic Review, American Economic Association, vol. 100(1), pages 590-607, March.
    4. Frean, Molly & Gruber, Jonathan & Sommers, Benjamin D., 2017. "Premium subsidies, the mandate, and Medicaid expansion: Coverage effects of the Affordable Care Act," Journal of Health Economics, Elsevier, vol. 53(C), pages 72-86.
    5. Nicole Maestas & Kathleen J. Mullen & Alexander Strand, 2014. "Disability Insurance and Health Insurance Reform: Evidence from Massachusetts," American Economic Review, American Economic Association, vol. 104(5), pages 329-335, May.
    6. Chandra, Amitabh & Gruber, Jonathan & McKnight, Robin, 2014. "The impact of patient cost-sharing on low-income populations: Evidence from Massachusetts," Journal of Health Economics, Elsevier, vol. 33(C), pages 57-66.
    7. Seth Freedman & Sayeh Nikpay & Aaron Carroll & Kosali Simon, 2017. "Changes in inpatient payer-mix and hospitalizations following Medicaid expansion: Evidence from all-capture hospital discharge data," PLOS ONE, Public Library of Science, vol. 12(9), pages 1-9, September.
    8. Kurt Lavetti & Kosali Simon, 2018. "Strategic Formulary Design in Medicare Part D Plans," American Economic Journal: Economic Policy, American Economic Association, vol. 10(3), pages 154-192, August.
    9. Borrescio-Higa, Florencia, 2015. "Can Walmart make us healthier? Prescription drug prices and health care utilization," Journal of Health Economics, Elsevier, vol. 44(C), pages 37-53.
    10. Amy Finkelstein & Nathaniel Hendren & Mark Shepard, 2017. "Subsidizing Health Insurance for Low-Income Adults: Evidence from Massachusetts," NBER Working Papers 23668, National Bureau of Economic Research, Inc.
    11. David M. Cutler & Jonathan Gruber, 1996. "Does Public Insurance Crowd out Private Insurance?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 111(2), pages 391-430.
    12. Liran Einav & Amy Finkelstein & Maria Polyakova, 2018. "Private Provision of Social Insurance: Drug-Specific Price Elasticities and Cost Sharing in Medicare Part D," American Economic Journal: Economic Policy, American Economic Association, vol. 10(3), pages 122-153, August.
    13. Dunn, Abe, 2016. "Health insurance and the demand for medical care: Instrumental variable estimates using health insurer claims data," Journal of Health Economics, Elsevier, vol. 48(C), pages 74-88.
    14. Meinhofer, Angélica & Witman, Allison E., 2018. "The role of health insurance on treatment for opioid use disorders: Evidence from the Affordable Care Act Medicaid expansion," Journal of Health Economics, Elsevier, vol. 60(C), pages 177-197.
    15. Craig Garthwaite & Tal Gross & Matthew J. Notowidigdo, 2018. "Hospitals as Insurers of Last Resort," American Economic Journal: Applied Economics, American Economic Association, vol. 10(1), pages 1-39, January.
    16. Gruber, Jonathan & Simon, Kosali, 2008. "Crowd-out 10 years later: Have recent public insurance expansions crowded out private health insurance?," Journal of Health Economics, Elsevier, vol. 27(2), pages 201-217, March.
    17. Amy Finkelstein & Sarah Taubman & Bill Wright & Mira Bernstein & Jonathan Gruber & Joseph P. Newhouse & Heidi Allen & Katherine Baicker, 2012. "The Oregon Health Insurance Experiment: Evidence from the First Year," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 127(3), pages 1057-1106.
    18. Robert Kaestner & Nasreen Khan, 2012. "Medicare Part D and Its Effect on the Use of Prescription Drugs and Use of Other Health Care Services of the Elderly," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 31(2), pages 253-279, March.
    19. Mariana Carrera & Dana P. Goldman & Geoffrey Joyce & Neeraj Sood, 2018. "Do Physicians Respond to the Costs and Cost-Sensitivity of Their Patients?," American Economic Journal: Economic Policy, American Economic Association, vol. 10(1), pages 113-152, February.
    20. Liran Einav & Amy Finkelstein & Paul Schrimpf, 2015. "The Response of Drug Expenditure to Nonlinear Contract Design: Evidence from Medicare Part D," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 130(2), pages 841-899.
    21. Neale Mahoney, 2015. "Bankruptcy as Implicit Health Insurance," American Economic Review, American Economic Association, vol. 105(2), pages 710-746, February.
    22. Wagner, Kathryn L., 2016. "Shock, but no shift: Hospitals' responses to changes in patient insurance mix," Journal of Health Economics, Elsevier, vol. 49(C), pages 46-58.
    23. Decker, Sandra L. & Lipton, Brandy J., 2015. "Do Medicaid benefit expansions have teeth? The effect of Medicaid adult dental coverage on the use of dental services and oral health," Journal of Health Economics, Elsevier, vol. 44(C), pages 212-225.
    24. Amitabh Chandra & Jonathan Gruber & Robin McKnight, 2010. "Patient Cost-Sharing and Hospitalization Offsets in the Elderly," American Economic Review, American Economic Association, vol. 100(1), pages 193-213, March.
    25. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-In-Differences Estimates?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(1), pages 249-275.
    26. Jonathan D. Ketcham & Kosali Simon, 2008. "Medicare Part D's Effects on Elderly Drug Costs and Utilization," NBER Working Papers 14326, National Bureau of Economic Research, Inc.
    27. David Zimmer, 2015. "The effect of Medicare Part D on prescription drug composition and demand," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 42(2), pages 170-185, May.
    28. Charles Courtemanche & James Marton & Benjamin Ukert & Aaron Yelowitz & Daniela Zapata, 2017. "Early Impacts of the Affordable Care Act on Health Insurance Coverage in Medicaid Expansion and Non‐Expansion States," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 36(1), pages 178-210, January.
    29. Huh, Jason & Reif, Julian, 2017. "Did Medicare Part D reduce mortality?," Journal of Health Economics, Elsevier, vol. 53(C), pages 17-37.
    30. Kosali Simon & Aparna Soni & John Cawley, 2017. "The Impact of Health Insurance on Preventive Care and Health Behaviors: Evidence from the First Two Years of the ACA Medicaid Expansions," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 36(2), pages 390-417, March.
    31. Wong, Albert & Wouterse, Bram & Slobbe, Laurentius C.J. & Boshuizen, Hendriek C. & Polder, Johan J., 2012. "Medical innovation and age-specific trends in health care utilization: Findings and implications," Social Science & Medicine, Elsevier, vol. 74(2), pages 263-272.
    32. Kosali Simon & Sharon Tennyson & Julie Hudman, 2009. "Do State Cost Control Policies Reduce Medicaid Prescription Drug Spending?," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 12(1), pages 39-66, March.
    33. Haiden Huskamp & Julie Donohue & Catherine Koss & Ernst Berndt & Richard Frank, 2008. "Generic Entry, Reformulations and Promotion of SSRIs in the US," PharmacoEconomics, Springer, vol. 26(7), pages 603-616, July.
    34. Padmaja Ayyagari & Dan M. Shane & George L. Wehby, 2017. "The Impact of Medicare Part D on Emergency Department Visits," Health Economics, John Wiley & Sons, Ltd., vol. 26(4), pages 536-544, April.
    35. Alpert, Abby, 2016. "The anticipatory effects of Medicare Part D on drug utilization," Journal of Health Economics, Elsevier, vol. 49(C), pages 28-45.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Barkowski, Scott & Jun, Dajung & Zhang, Yuting, 2022. "Medicaid Expansion Spillover Effects on Health Care Consumption and Coverage: Evidence from Medicare Administrative Data," MPRA Paper 112178, University Library of Munich, Germany.
    2. Namkee G. Choi & Diana M. DiNitto & Bryan Y. Choi, 2020. "Unmet Healthcare Needs and Healthcare Access Gaps Among Uninsured U.S. Adults Aged 50–64," IJERPH, MDPI, vol. 17(8), pages 1-12, April.
    3. Sarah Miller & Norman Johnson & Laura R Wherry, 2021. "Medicaid and Mortality: New Evidence From Linked Survey and Administrative Data," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 136(3), pages 1783-1829.
    4. Maclean, Johanna Catherine & Tello-Trillo, Sebastian & Webber, Douglas, 2023. "Losing insurance and psychiatric hospitalizations," Journal of Economic Behavior & Organization, Elsevier, vol. 205(C), pages 508-527.
    5. Laetitia Lebihan, 2023. "The impact of a mandatory universal drug insurance program on health behaviors and outcomes," Health Economics, John Wiley & Sons, Ltd., vol. 32(9), pages 2006-2046, September.
    6. Deiana Claudio & Giua Ludovica, 2021. "The Intended and Unintended Effects of Opioid Policies on Prescription Opioids and Crime," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 21(2), pages 751-792, April.
    7. Newham, Melissa & Valente, Marica, 2024. "The cost of influence: How gifts to physicians shape prescriptions and drug costs," Journal of Health Economics, Elsevier, vol. 95(C).
    8. Melissa McInerney & Jennifer M. Mellor & Lindsay M. Sabik, 2021. "Welcome Mats and On‐Ramps for Older Adults: The Impact of the Affordable Care Act's Medicaid Expansions on Dual Enrollment in Medicare and Medicaid," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 40(1), pages 12-41, January.
    9. Lizhong Peng & Xiaohui Guo & Chad D. Meyerhoefer, 2020. "The effects of Medicaid expansion on labor market outcomes: Evidence from border counties," Health Economics, John Wiley & Sons, Ltd., vol. 29(3), pages 245-260, March.
    10. Isaac, Elliott & Jiang, Haibin, 2022. "Tax-Based Marriage Incentives in the Affordable Care Act," IZA Discussion Papers 15331, Institute of Labor Economics (IZA).
    11. Marguerite Burns & Laura Dague, 2023. "In-Kind Welfare Benefits and Reincarceration Risk: Evidence from Medicaid," NBER Working Papers 31394, National Bureau of Economic Research, Inc.
    12. Mengna Luan & Wenjing Shi & Zhigang Tao & Hongjie Yuan, 2023. "When patients have better insurance coverage in China: Provider incentives, costs, and quality of care," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 31(4), pages 1073-1106, October.
    13. Olga Scrivner & Thuy Nguyen & Kosali Simon & Esmé Middaugh & Bledi Taska & Katy Börner, 2020. "Job postings in the substance use disorder treatment related sector during the first five years of Medicaid expansion," PLOS ONE, Public Library of Science, vol. 15(1), pages 1-15, January.
    14. Mukhopadhyay, Sankar, 2022. "The Effects of Medicaid Expansion on Job Loss Induced Mental Distress during the COVID-19 Pandemic in the US," IZA Discussion Papers 15150, Institute of Labor Economics (IZA).
    15. J Dustin Tracy & Kevin A James & Hillard Kaplan & Stephen Rassenti, 2021. "An investigation of health insurance policy and behavior in a virtual environment," PLOS ONE, Public Library of Science, vol. 16(4), pages 1-26, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Helen Levy & Thomas Buchmueller & Sayeh Nikpay, 2019. "The Impact of Medicaid Expansion on Household Consumption," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 45(1), pages 34-57, January.
    2. Dunn, Abe & Knepper, Matthew & Dauda, Seidu, 2021. "Insurance expansions and hospital utilization: Relabeling and reabling?," Journal of Health Economics, Elsevier, vol. 78(C).
    3. Lindsey Rose Bullinger, 2021. "Child Support and the Affordable Care Act's Medicaid Expansions," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 40(1), pages 42-77, January.
    4. Ausmita Ghosh & Kosali Simon & Benjamin D. Sommers, 2017. "The Effect of State Medicaid Expansions on Prescription Drug Use: Evidence from the Affordable Care Act," NBER Working Papers 23044, National Bureau of Economic Research, Inc.
    5. Charles Courtemanche & James Marton & Benjamin Ukert & Aaron Yelowitz & Daniela Zapata, 2018. "Early Effects of the Affordable Care Act on Health Care Access, Risky Health Behaviors, and Self‐Assessed Health," Southern Economic Journal, John Wiley & Sons, vol. 84(3), pages 660-691, January.
    6. Joan Costa-Font & Nilesh Raut & Courtney H. Van Houtven, 2024. "Medicaid Expansion and the Mental Health of Spousal Caregivers," Review of Economics of the Household, Springer, vol. 22(3), pages 1047-1084, September.
    7. Francesco Renna & Vasilios D. Kosteas & Kuchibhotla Dinkar, 2021. "Inequality in health insurance coverage before and after the Affordable Care Act," Health Economics, John Wiley & Sons, Ltd., vol. 30(2), pages 384-402, February.
    8. Melissa McInerney & Jennifer M. Mellor & Lindsay M. Sabik, 2021. "Welcome Mats and On‐Ramps for Older Adults: The Impact of the Affordable Care Act's Medicaid Expansions on Dual Enrollment in Medicare and Medicaid," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 40(1), pages 12-41, January.
    9. Sarah Miller & Luojia Hu & Robert Kaestner & Bhashkar Mazumder & Ashley Wong, 2021. "The ACA Medicaid Expansion in Michigan and Financial Health," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 40(2), pages 348-375, March.
    10. Black, Bernard & Hollingsworth, Alex & Nunes, Letícia & Simon, Kosali, 2022. "Simulated power analyses for observational studies: An application to the Affordable Care Act Medicaid expansion," Journal of Public Economics, Elsevier, vol. 213(C).
    11. Kurt Lavetti & Thomas DeLeire & Nicolas R. Ziebarth, 2023. "How do low‐income enrollees in the Affordable Care Act marketplaces respond to cost‐sharing?," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 90(1), pages 155-183, March.
    12. Charles Courtemanche & James Marton & Benjamin Ukert & Aaron Yelowitz & Daniela Zapata, 2019. "Effects of the Affordable Care Act on Health Behaviors After 3 Years," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 45(1), pages 7-33, January.
    13. Cortnie Shupe, 2023. "Public Health Insurance and Medical Spending: The Incidence of the ACA Medicaid Expansion," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 42(1), pages 137-165, January.
    14. Sarah Miller & Norman Johnson & Laura R Wherry, 2021. "Medicaid and Mortality: New Evidence From Linked Survey and Administrative Data," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 136(3), pages 1783-1829.
    15. Jean M. Abraham & Anne B. Royalty & Coleman Drake, 2019. "The impact of Medicaid expansion on employer provision of health insurance," International Journal of Health Economics and Management, Springer, vol. 19(3), pages 317-340, December.
    16. Owen (O.A.) O'Donnell, 2019. "Financial Protection Against Medical Expense," Tinbergen Institute Discussion Papers 19-010/V, Tinbergen Institute.
    17. Paul Heaton & Caleb Flint, 2021. "Medicaid coverage expansions and liability insurance," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 88(1), pages 29-51, March.
    18. Masanori Kuroki, 2021. "The effect of health insurance coverage on personal bankruptcy: evidence from the Medicaid expansion," Review of Economics of the Household, Springer, vol. 19(2), pages 429-451, June.
    19. Abraham Abebe Asfaw, 2019. "The effect of prescription drug insurance on health behavior: Evidence from Medicare Part D," Health Economics, John Wiley & Sons, Ltd., vol. 28(3), pages 403-418, March.
    20. Lindsey Rose Bullinger & Maithreyi Gopalan & Caitlin McPherran Lombardi, 2023. "Impacts of publicly funded health insurance for adults on children's academic achievement," Southern Economic Journal, John Wiley & Sons, vol. 89(3), pages 860-884, January.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jhecon:v:63:y:2019:i:c:p:64-80. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/505560 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.