Insurance Choice And The Demand For Prescription Drugs Among Individuals With Chronic Conditions

This study explores insurance choice of the chronically ill non-elderly adults and their utilization and expenditures on prescription drugs. Discrete factor model is used to estimate an individual\u27s probability of any drug use and the conditional level of utilization and associated out-of-pocket expenditures. Analyses on four subpopulation groups, i.e. hypertension, diabetes, asthma and depression, provide detailed insights into individuals\u27 health insurance decision making and subsequent prescription drug filling behavior, given their health insurance status. The results indicate that only a few health risk factors are statistically significant in determining an individual\u27s health insurance status, and that the direction of the effects are mixed, implying no definite pattern of self-selection. Meanwhile, most health characteristic variables are strongly related to overall use of prescription drugs. The association between health insurance and prescription drug utilization and expenditures differs by condition. The greatest one is evident among individuals with depression or hypertension, while the weakest is among individuals with asthma. These findings have important implication for policy makers and plan designers in evaluating the affordability of the combination of drugs, assessing individuals\u27 financial burden of drug treatment and rationalizing drug formulary decisions, to ultimately improve population health outcomes