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Methodological Issues in Estimating Prescription Drug Coverage Using the Medicare Current Beneficiary Survey

Published estimates vary widely on how many Medicare beneficiaries have prescription drug coverage, the source of the coverage, and the stability of that coverage. Discrepancies arise among these basic estimates because no standardized method exists for measuring prescription drug coverage. Because analyses regarding the new Medicare drug benefit require a consistent understanding of both baseline and future coverage levels, the resolution of these issues is a pressing concern.

This AARP Public Policy Institute Issue Paper describes the available methods and technical concerns in estimating drug coverage using the primary data source available for such analyses, the Medicare Current Beneficiary Survey (MCBS) which is sponsored by the Centers for Medicare and Medicaid Services (CMS). Specifically, the paper uses the 2001 MCBS to demonstrate that methods matter in estimating prescription drug coverage, i.e., different methodological approaches produce different results for various measures of drug coverage – such as presence, duration, source, and generosity – among the Medicare population.

The absence of a standardized method for measuring prescription drug coverage is a concern because these analyses will have a major bearing on how successful the Medicare Modernization Act (MMA) ultimately is considered to be in providing meaningful drug coverage to the Medicare population as a whole. The authors conclude that researchers can best aid policymakers by being transparent and applying consistent approaches. (30 pages)

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