Expanded prescription coverage and opioid use disorders: Evidence from Medicare Part D

Abstract

Medicare Part D, implemented on January 2006, expanded subsidized outpatient prescription-drug coverage, including medication-assisted treatment (MAT) drugs, for adults aged 65 and older. Using 6.2 million discharge records from the 2001 to 2011 Healthcare Cost and Utilization Project National Inpatient Sample, I study how this policy influenced serious opioid use disorder (OUD) events. The analysis uses a difference-in-differences framework that compares OUD-related hospitalizations among 65- to 69-year-olds with those of 60- to 64-year-olds, and an event study confirms parallel trends before implementation. Part D lowered OUD-related hospital admissions by 158.3 per 100,000 discharges, a 53% decline from the pre-policy mean. The reduction is concentrated in admissions that include diagnoses of opioid abuse or dependence, whereas admissions related to opioid poisoning show little change. Larger proportional declines among Black and Hispanic adults and among men indicate that changes in drug coverage were accompanied by differences in outcomes across demographic groups. Estimates are robust across alternative specifications. By reducing out-of-pocket costs for MAT drugs covered by Part D, comprehensive prescription benefits can substantially cut avoidable hospital stays even when individual treatment uptake is not observed. These findings inform current debates on drug-benefit design for aging populations confronting opioid-related harm and illustrate how insurance coverage shapes health production later in life.