Report to the President: Prescription Drug Coverage, Spending, Utilization, and Prices.. MEPS Price Data

04/01/2000

It should be emphasized that, while some aspects of the MEPS method of assigning coverage may introduce potential biases into its estimates of relative utilization by covered and noncovered beneficiaries, there is no reason to believe that chapter 3 overstates the price differences for the two groups. It was noted earlier that, while MEPS treats as having drug coverage people who failed to report coverage but had a third-party payment, there was no way of identifying people who failed to report their coverage and who received no drugs during the year. For the purpose of pricing comparisons, the omission of the latter group from the covered category does not affect the results (since they had no prescription to price). There does remain the issue of treating all Medicaid beneficiaries and Medicare HMO enrollees as having drug coverage. Some noncovered people in these populations have been included in the covered category. However, because people without coverage routinely pay more for their prescriptions than people with coverage, the probable result is that the MEPS data understate rather than overstate price differentials for the covered and noncovered.

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