Friday, February 24, 2012

Researchers Repeatedly Find Cost Sharing Harms Medicaid Beneficiaries’ Access to Care and Health Status

 Cost-sharing is one of the most studied aspects of the Medicaid program.  Over three
decades of research overwhelmingly establish that heightened copayments make it harder
for beneficiaries to afford medical services, while premiums make it harder for eligible
individuals to enroll and maintain coverage.  The adverse consequences of cost sharing
include poorer health and increased use of high-cost services like emergency rooms.
Leighton Ku & Victoria Wachino, The Effect of Increased Cost Sharing in Medicaid: A Summary of Research Findings (2005), available at

 100,000 people lost Medicaid coverage in Missouri because of less generous eligibility
standards, higher premiums and the expansion of copayments to nearly all Medicaidcovered services and prescription drugs.  After Missouri cut Medicaid, the number of uninsured individuals increased, hospitals became burdened with more uncompensated care, and revenue shortfalls forced community health centers to charge patients more and obtain larger state grants.
Stephen Zuckerman et al., Missouri’s 2005 Medicaid Cuts: How Did They Effect Enrollees and Providers?
HEALTH AFF (online ed. Feb. 2009), available at

 Medicaid cost sharing adds to families’ financial hardship, forcing difficult choices between
necessary health care and other basic necessities.
Thomas M. Seldon et al., Cost sharing in Medicaid and CHIP: How Does It Affect Out-of-Pocket Spending? 28 HEALTH AFF. W607 (online ed. 2009),

 Nominal copayments are associated with significant reductions in the use of clinically
important drugs.  When the Oregon Medicaid program implemented copayments for
prescription drugs, set at $2 for generics and $3 for brand name drugs, utilization of
prescription drugs declined by 17%.  Reduction in prescription drug use was observed in
every therapeutic category studied with the greatest reductions occurring for drugs treating
depression and respiratory disease.
Daniel Hartung et al., Impact of a Medicaid Copayment Policy on Prescription Drug and Health Services
Utilization in a Fee-for-Service Medicaid Population, 46 MED. CARE 565, (2008) available at

A dramatic reduction in Medicaid enrollment occurred in Oregon after the state imposed
new copays, ranging from $5 for an outpatient physician visits and $250 for an inpatient
hospital admissions, and new premiums ranging from $6 to $20 a month. Those who left
the program because of the heightened cost sharing had inferior access to needed care,
were significantly less likely to visit a primary care physician, and used the emergency room
more often than those who left the program for other reasons.
Bill Wright, et al., The Impact of Increased Cost Sharing on Medicaid Enrollees, HEALTH AFF. (online ed.,
July/August 2005), available at

 The Oregon Medicaid program’s copayment policies did not provide the expected cost
savings because individuals skipped preventive care and used more costly hospital
emergency care. Neal T. Wallace et al., How Effective Are Copayments in Reducing Expenditures for Low-Income Adult Medicaid Beneficiaries? Experience from the Oregon Health Plan, 43 HEALTH SERV. RES. 515 (2008), available at

 Women living in areas with lower median incomes were disproportionately affected by cost
sharing and more likely to forgo breast cancer screening than women from more affluent
areas. An analysis of Medicare plans also found that breast-cancer screening rates, among
women who should be screened according to clinical guidelines, were 77.5% in full coverage
plans, compared to only 69.2% in cost sharing plans.
Amal Trivedi et al, Effect of Cost Sharing on Screening Mammography in Medicare Health Plans, 358 NEW
ENG. J. MED. 375 (2008), available at

 Patients in low-income areas are significantly more sensitive to increases in drug
copayments than patients from high- or middle-income areas. Increased drug copayments
make it more likely that low-income patients will be unable to adhere to medication
instructions, worsening health disparities. A 10% increase in copayment for certain drugs
(statins) decreased medication adherence by more than 12% for patients living in an area
with a median household incomes of less than $30,000 compared with a decrease of less
than 2% for patients living in areas with a median income of more than $62,000.
Michael Chernew et al, Effects of Increased Patient Cost Sharing on Socioeconomic Disparities in Health
Care, 23 J. GEN. INTERN MED. 1131, (2008), available at

 Because low-income families live on slim margins, even nominal copayments lead to unmet
medical needs. Families, outreach workers, and providers in Washington State all reported
that immigrant families had significant difficulty paying for prescription drugs when new
copayments were imposed.
Mark Gardner & Janet Varon, Moving Immigrants from a Medicaid Look-Alike Program to Basic Health in
Washington State: Early Observations (May 2004) available at

A Utah study found that instituting a Medicaid copayment of $2 per prescription led to 13%
of enrollees not filling their prescriptions because they couldn’t afford the co-pay. When
enrollees started getting charged $3 copayments for doctor visits, 11% of enrollees did not
to go to the doctor because they couldn’t afford it.
Office of the Executive Director, Utah Department of Health, Medicaid Benefits Change Impact Study,

 When a prescription coinsurance and deductible cost-sharing policy was introduced in
Quebec, Canada, the use of essential drugs decreased by 14% for welfare beneficiaries. This
caused emergency room visits to increase by 78% and serious adverse health events to
increase by 88%.
Robyn Tamblyn, et al., Adverse Events Associated with Prescription Drug Cost-Sharing among Poor and
Elderly Persons, J. AM. MED. ASS’N (online ed. January 2001), available at

 Elderly and disabled Medicaid beneficiaries who reside in states that charge copayments
have lower rates of prescription drug use. The primary effect of copayments is to reduce
the likelihood that beneficiaries will fill their doctors’ prescriptions. This burden falls
disproportionately on beneficiaries in poor health.
Stuart B, Zacker C., Who Bears the Burden of Medicaid Drug Co-payment Policies? HEALTH AFF. (online ed., March/April 1999) available at

 Caps placed on prescription drugs in the New Hampshire Medicaid program increased the
cost of mental health services by a factor of more than 17, compared to the savings in drug
expenditures, because beneficiaries were more likely to be admitted into hospitals or
nursing homes.
Steven B. Soumerai et al., Effects of Medicaid Drug-Payment Limits on Admission to Hospitals and Nursing
Homes, 331 NEW ENG. J. MED. 1072 (1991), available at

 The imposition of $1.00 copayments for services in California in the 1970’s caused affected
Medicaid beneficiaries to reduce their use of necessary care, decreasing immunizations by
45%, Pap smears by 21.5%, and obstetrical care by 58%.
As described by Julie Hudman and Molly O’Malley, Health Insurance Premiums and Cost-Sharing: Findings
from the Research on Low-Income Populations, (March 2003), available at

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