Department of Economics

Income-related Patient Cost-sharing: Simulation for Prescription Drugs under Medicare

Department of Economics
University of Delaware
Working Paper #2008-05

Income-related Patient Cost-sharing: Simulation for Prescription Drugs under Medicare

Kenneth A. Lewis and Laurence S. Seidman

ABSTRACT

This paper studies an application of income-related patient cost-sharing.  Using data from the Medicare Current Beneficiary Survey, we find that varying patient cost-sharing rates with patient income in the Medicare prescription drug program can reduce the severity of two problems: high percent-of-income burdens, and unequal medication due to income.  We estimate behavioral responses in the Medicare population and incorporate the estimates into a micro-simulation model which uses data that are representative of the actual Medicare population.  We find that introducing income-related patient cost-sharing into a Medicare drug program can dramatically reduce the severity of the two problems.

JEL Code: I18

Key Words: Patient Cost-Sharing, Medicare

The Lerner College is home to a state-of-the-art financial trading facility, the $1.4 million student-led Blue Hen Investment Fund, a student-managed restaurant and hotel, a high-technology development center of a global bank and a start-up experience for students with new business ideas.

Lerner College faculty - like Anu Sivaraman, who is among Social Media Marketing Magazine’s “Top 100 Marketing Professors on Twitter” and MBAprograms.org’s “Top 50 Marketing Professors on Twitter” - are thought leaders who command attention from influential business audiences, economists and policy makers.

All Lerner College departments offer experience-driven learning and emphasize evidence-based analytics methods to enrich the student experience. Here, finance students visit New York City’s financial districts for a first-hand look at markets trading and to meet with UD alumni.

Charles W. Horn, AS75, and wife Patricia, recently made a $3 million commitment to enhance and expand entrepreneurial studies.

  • Alfred Lerner College of Business & Economics
    303 Alfred Lerner Hall  •  Newark, DE 19716  •  USA  •  ©