Yang, Zhou. <br/><br/>
Prescription Drugs, Medical Care, and Health Outcomes:  A Model of Elderly Health Dynamics / 
Zhou Yang, Donna B. Gilleskie, Edward C. Norton. 
 - Cambridge, Mass.  National Bureau of Economic Research  2004. 
 - 1 online resource:  illustrations (black and white); 
 - NBER working paper series  no. w10964 .
 - Working Paper Series (National Bureau of Economic Research)  no. w10964. .
<br/><br/> December 2004. 
<br/><br/> There is much debate about whether the Medicare Prescription Drug Bill -- the greatest expansion of Medicare benefits since its creation in 1965 -- will improve the health of elderly Americans, and how much it will cost. We model how insurance affects medical care utilization, and subsequently, health outcomes over time in a dynamic model with correlated errors. Longitudinal individual-level data from the 1992-1998 Medicare Current Beneficiary Survey provide estimates of these effects. Simulations over five years show that expanding prescription drug coverage would increase drug expenditures by between 12% and 17%. However, other health care expenditures would only increase slightly, and the mortality rate would improve. 
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