Mind the gap! consumer perceptions and choices of medicare part d prescription drug plans
By: Florian Heiss, Daniel McFadden, Joachim Winter.
Contributors: McFadden, Daniel.; Winter, Joachim.; National Bureau of Economic Research.
Series: NBER working paper series -- working paper 13627; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 13627.
Publisher: National Bureau of Economic Research
Published: 2007
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Description: "Medicare Part D provides prescription drug coverage through Medicare approved plans offered by private insurance companies and HMOs.  In this paper, we study the role of current prescription drug use and health risks, related expectations, and subjective factors in the demand for prescription drug insurance.  To characterize rational behavior in the complex Part D environment, we develop an intertemporal optimization model of enrollment decisions.  We generally find that seniors' choices respond to the incentives provided by their own health status and the market environment as predicted by the optimization model.  The proportion of individuals who do not attain the optimal choice is small, but the margin for error is also small since enrollment is transparently optimal for most eligible seniors.  Further, there is also evidence that seniors over-react to some salient features of the choice situation, do not take full account of the future benefit and cost consequences of their decisions, or the expected net benefits and risk properties of alternative plans"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 12/7/2007.

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