We study the Medicare Part D prescription drug insurance program as a bellwether for designs of private, non-mandatory health insurance markets, focusing on the ability of consumers to evaluate and optimize their choices of plans. Our analysis of administrative data on medical claims in Medicare...

Drugs and medicines account for about half of the total medical out-of-pocket expenses of households. This share of drugs to total medical expenses is much higher for the poor than the rich. Thus, affordability of medicines is an important issue in poverty reduction. Recent efforts to improve...