Seniors Are Living Longer, Thanks to Medicare Part D

A decade after Medicare Part D gave America’s seniors greater access to prescription drugs, researchers from the University of Illinois have determined that the program has helped people live longer.

Mortality among the elderly has dropped by 2.2% annually, according to the findings, which were published earlier this month in the Journal of Health Economics. “This was driven primary by a reduction in cardiovascular mortality, the leading cause of death in the elderly,” the researchers wrote. The addition of Medicare Part D did not affect deaths from cancer, as treatments are covered under Medicare Part B.

The researchers calculated the value of the mortality reduction at $5 billion per year.

“A big question in health economics is, ‘Do public health insurance programs improve people’s health?’” Julian Reif, PhD, professor of finance and economics at the university, said in a statement. “You would think the answer would be obvious, but it’s a hard thing to prove. This paper provides strong evidence that health insurance programs improve health, and that reducing the price of medical care also improves health.”

Researchers examined differences in mortality between those age 66 who had been eligible for Medicare Part D for at least 1 year, and those age 64 who were not yet eligible for the program. They found a 2.2% annual decrease in the mortality rate among 66 year olds compared with the 64 year olds, driven by a 4.4% reduction in cardiovascular mortality.

"We employed detailed cause-of-death mortality records for the entire US population, which allowed us to measure mortality, a relatively rare event, very precisely," Reif said. "A lot of other studies can't look at mortality because their sample size is too small."

According to the researchers, Medicare Part D covers 39 people at a cost of $70 billion a year. Besides computing the value of living longer, the researchers looked at other studies to compute non-health benefits and computed a total benefit of $20 billion a year.

But finding the value of Medicare Part D isn’t just about the cost of the drugs minus the computed benefit.

There’s certainly more to health than how long you live,” Reif said. “We look at mortality because it’s easy to measure. But you take prescription drugs not just to live longer, but also to relieve pain or to manage symptoms. There are quality-of-life benefits as well that come from healthcare; it’s just harder to measure those.”

Reference

Huh J, Reif J. Did Medicare Part D reduce mortality? J Health Econ. 2017; 53:17-37. http://dx.doi.org/10.1016/j.jhealeco.2017.01.005