The Economic Burden of Out-of-Pocket Medical Expenditures Before and after Implementation of the Medicare Prescription Drug Program

Abstract

Older Americans, although covered by Medicare, bear a large economic burden of medical expenses in the form of premiums for Medicare and supplemental plans, as well as the cost of uncovered or under-covered medical services. This study compares the patterns of this economic burden in 2010 with the baseline year of 2005. The period covered was marked by economic shocks, health care technology innovations and major Medicare reforms, including implementation of the prescription drug (Part D) program and changes in premium rules. Consequently, we present a description of the economic burden and do not attempt to make causal inferences. The definition of expenditures is limited to three components of out-of-pocket (OOP) medical spending: premiums, prescription drugs costs, and health services. While this definition is a limitation of the study, it also allows the researchers to focus on the costs most likely to be affected by improved access to prescription drugs and premium reforms.