Medicare Part D and the financial protection of the elderly

Gary V. Engelhardt, Jonathan Gruber

Research output: Contribution to journalArticlepeer-review

62 Scopus citations


We examine the impact of the expansion of public prescription-drug insurance coverage from Medicare Part D and find evidence of substantial crowd-out. Using the 2002-2007 waves of the Medical Expenditure Panel Survey, we estimate the extension of Part D benefits resulted in 75 percent crowd-out of both prescription-drug insurance coverage and expenditures of those 65 and older. Part D is associated with sizeable reductions in out-of-pocket spending, much of which has accrued to a small proportion of the elderly. On average, we estimate a welfare gain from Part D comparable to the deadweight cost of program financing.

Original languageEnglish (US)
Pages (from-to)77-102
Number of pages26
JournalAmerican Economic Journal: Economic Policy
Issue number4
StatePublished - Nov 2011

ASJC Scopus subject areas

  • General Economics, Econometrics and Finance


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