Effect of Low-Income Elderly Insurance Copayment Subsidies

The authors use a two-part model of demand to model the impact of qualified Medicare beneficiary (QMB) enrollment on medical care use. Assuming QMB enrollment to be exogenous, they find Medicare Part B utilization to be 12 percent higher and Part B expenditures 44 percent greater among QMBs than among eligible non-enrollees. There is no difference between these two groups in overall Part A expenditures. Modeling the possibility that QMB enrollment is endogenous, the authors find qualitatively similar results, but the estimates are not precisely estimated.