Does prescription drug coverage improve mental health? Evidence from Medicare Part D

The introduction of the Medicare Prescription Drug program (Part D) in 2006 resulted in a significant increase in access to coverage for older adults in the U.S. Several studies have documented the impact of this program on prescription drug utilization, expenditures and medication adherence among older adults. However, few studies have evaluated the extent to which these changes have affected the health of seniors. In this study we use data from the Health and Retirement Study to identify the impact of the Medicare Part D program on mental health. Using a difference-in-difference approach, we find that the program significantly reduced depressive symptoms among older adults. We explore the mechanisms through which this effect operates and evaluate heterogeneity in impact.