The Increasing Adoption of Out-of-Pocket Cost Caps: Benefits, Unintended Consequences, and Policy Opportunities

This Viewpoint discusses potential benefits and unintended consequences of out-of-pocket cost caps in Medicare and the employer-sponsored health insurance market and provides suggested policy opportunities to address shortcomings.

Trends in and Factors Associated With Out-of-Pocket Spending for COVID-19 Hospitalizations From March 2020 to March 2021

This cross-sectional study assessed the factors associated with out-of-pocket spending for COVID-19 hospitalizations from March 2020 to March 2021

An investigation of health insurance policy and behavior in a virtual environment

We introduce a new experimental approach to measuring the effects of health insurance policy alternatives on behavior and health outcomes over the life course. In a virtual environment with multi-period lives, subjects earn virtual income and allocate spending, to maximize utility, which is converted into cash payment. We compare behavior across age, income and insurance plans-one priced according to an individual's expected cost and the other uniformly priced through employer-implemented cost sharing. We find that 1) subjects in the employer-implemented plan purchased insurance at higher rates; 2) the employer-based plan reduced differences due to income and age; 3) subjects in the actuarial plan engaged in more health-promoting behaviors, but still below optimal levels, and did save at the level required, so did realize the full benefits of the plan. Subjects had more difficulty optimizing choices in the Actuarial treatment, because it required more long term planning and evaluating benefits that compounded over time. Contrary, to model predictions, the actuarial priced insurance plan did not increase utility relative to the employer-based plan.

Addressing Insulin Access and Affordability: An Endocrine Society Position Statement

Rising costs have made access to affordable insulin far more difficult for people with diabetes, especially low-income individuals, those on high deductible health plans, beneficiaries using Medicare Part B to cover insulin delivered via pump, Medicare beneficiaries in the Part D donut hole, and those who turn 26 and must transition from their parents' insurance, to manage their diabetes and avoid unnecessary complications and hospitalizations. For many patients with diabetes, insulin is a life-saving medication. Policymakers should immediately address drivers of rising insulin prices and implement solutions that would reduce high out-of-pocket expenditures for patients. The Endocrine Society recommends policy options to expand access to lower cost insulin in this paper.

Financing health care in Tunisia. Current state of health care expenditure and socialization prospects, on the road to Universal Health Coverage

CONTEXT

As part of its strategy of Universal Health Coverage (UHC), Tunisia has calculated, after its revolution, its Health Accounts (HA), in a standardized and interdepartmental way.

OBJECTIVES

Describe the current structure of care financing in Tunisia, through the HA reports, from 2012 to 2014, and assess its compliance with the principles of socialization of health insurance.

METHODS

Crude data on health care expenditures were collected by a multi-departmental group that is responsible for calculating health accounts, using a methodology developed by WHO. On the basis of these data, a dozen of indicators that serve to monitor the financing of care, were determined, especially the proportion of public care expenditure (state and insurance), the proportion of direct payments of households in total care expenditure. and the share of expenses of the National Diseases Insurance Fund (CNAM) in the private sector.

RESULTS

During the 2012-2014 trienniums, the total health expenditure represented 7% of GDP. Public expenditure on health care did not exceed 57% of the total health expenditure, which is 4% of GDP. Households paid directly, from their pockets, 39% of current care expenditures. About half of the expenses of the CNAM, was released for the reimbursement of consultations, explorations and hospitalizations in private clinics and medical needs (drugs and medical material) in private pharmacies.

CONCLUSION

The financing of the post-revolution care system in Tunisia was characterized by a dangerous triad for its survival, performance and equity: excessive spending compared to the country's growth, a very high contribution of households exceeding the cutoff of "catastrophic" spending, and a marked shift in the social policy of the CNAM, in favor of the private sector. This profile, proof of low socialization of healthcare financing, would be a limiting factor in the implementation of the CSU strategy in Tunisia.

Impact of consumer copayments for subsidised medicines on health services use and outcomes: a protocol using linked administrative data from Western Australia

INTRODUCTION

Across the world, health systems are adopting approaches to manage rising healthcare costs. One common strategy is a medication copayments scheme where consumers make a contribution (copayment) towards the cost of their dispensed medicines, with remaining costs subsidised by the health insurance service, which in Australia is the Federal Government.In Australia, copayments have tended to increase in proportion to inflation, but in January 2005, the copayment increased substantially more than inflation. Results from aggregated dispensing data showed that this increase led to a significant decrease in the use of several medicines. The aim of this study is to determine the demographic and clinical characteristics of individuals ceasing or reducing statin medication use following the January 2005 Pharmaceutical Benefit Scheme (PBS) copayment increase and the effects on their health outcomes.

METHODS AND ANALYSIS

This whole-of-population study comprises a series of retrospective, observational investigations using linked administrative health data on a cohort of West Australians (WA) who had at least one statin dispensed between 1 May 2002 and 30 June 2010. Individual-level data on the use of pharmaceuticals, general practitioner (GP) visits, hospitalisations and death are used.This study will identify patients who were stable users of statin medication in 2004 with follow-up commencing from 2005 onwards. Subgroups determined by change in adherence levels of statin medication from 2004 to 2005 will be classified as continuation, reduction or cessation of statin therapy and explored for differences in health outcomes and health service utilisation after the 2005 copayment change.

ETHICS AND DISSEMINATION

Ethics approvals have been obtained from the Western Australian Department of Health (#2007/33), University of Western Australia (RA/4/1/1775) and University of Notre Dame (0 14 167F). Outputs from the findings will be published in peer reviewed journals designed for a policy audience and presented at state, national and international conferences.

Want to fight chronic disease? Stop subsidizing drug companies

Healthcare systems have made great strides in recent years in learning how to use their medical records and claims data to identify patients at high risk of contracting chronic diseases such as diabetes. Unfortunately, under fee-for-service medicine, doing something with that information is rarely a smart move financially.

How the ACA's Health Insurance Expansions Have Affected Out-of-Pocket Cost-Sharing and Spending on Premiums

One important benefit gained by the millions of Americans with health insurance through the Affordable Care Act (ACA) is protection from high out-of-pocket health spending. While Medicaid unambiguously reduces out-of-pocket premium and medical costs for low-income people, it is less certain that marketplace coverage and other types of insurance purchased to comply with the law's individual mandate also protect from high health spending. Goal: To compare out-of-pocket spending in 2014 to spending in 2013; assess how this spending changed in states where many people enrolled in the marketplaces relative to states where few people enrolled; and project the decline in the percentage of people paying high amounts out-of-pocket. Methods: Linear regression models were used to estimate whether people under age 65 spent above certain thresholds. Key findings and conclusions: The probability of incurring high out-of-pocket costs and premium expenses declined as marketplace enrollment increased. The percentage reductions were greatest among those with incomes between 250 percent and 399 percent of poverty, those who were eligible for premium subsidies, and those who previously were uninsured or had very limited nongroup coverage. These effects appear largely attributable to marketplace enrollment rather than to other ACA provisions or to economic trends.

A Touchy Subject: Can Physicians Improve Value by Discussing Costs and Clinical Benefits With Patients?

A dramatic rise in the costs of health care—and cancer care in particular—has occurred over the last decade. Increasingly, these costs are being passed on to patients in the form of cost sharing, which can have a catastrophic effect on the financial well-being of patients and their families. This article advises physicians on the importance of patient-provider interaction about costs as a means to improving value in cancer care.

The Role of the Safety Net in Employer Health Benefit Decisions

The potential for sizable crowd-out of private expenditures by public insurance and delivery programs has been demonstrated. However, there is limited evidence about whether this stems from decisions of employers about their health benefit package or by decisions of workers. This study focuses on the role of public programs on employer decisions to offer insurance and the amount the employer contributes to the premium, using data from a large survey of employers and a database describing community characteristics. The study finds that both public insurance and public delivery programs have a significant effect on employer decisions, but the magnitude of the effect is small. Policies to limit crowd-out should focus on incentives to make continued private insurance purchase attractive to workers rather than incentives to employers.

Cost Sharing in Medicaid: Assumptions, Evidence, and Future Directions

Several states have received waivers to expand Medicaid to poor adults under the Affordable Care Act using more cost sharing than the program traditionally allows. We synthesize literature on the effects of cost sharing, focusing on studies of low-income U.S. populations from 1995 to 2014. Literature suggests that cost sharing has a deterrent effect on initiation of treatments, and can reduce utilization of ongoing treatments. Furthermore, cost sharing may be difficult for low-income populations to understand, patients often lack sufficient information to choose medical treatment, and cost sharing may be difficult to balance within the budgets of poor adults. Gaps in the literature include evidence of long-term effects of cost sharing on health and financial well-being, evidence related to effectiveness of cost sharing combined with patient education, and evidence related to targeted programs that use financial incentives for wellness. Literature underscores the need for evaluation of the effects of cost sharing on health status and spending, particularly among the poorest adults.

Uneven Health Outcomes and Political Resistance under Residual Neoliberalism in Africa

Africa has suffered two decades of policy implementation associated with the “neoliberal” macroeconomic as well as micro-development paradigm, and the health status of this continent has deteriorated markedly. Notwithstanding the discrediting of such policies since the late 1990s, they continue to be applied in Africa, especially by the World Bank and IMF, through Poverty Reduction Strategy Papers and the Highly Indebted Poor Countries debt relief initiative. Evidence can be found in the inadequate fiscal allocations to the health sector; the inadequate conceptualization of health in relation to other sectors; insufficient consultation with civil society; ongoing implementation of cost-recovery and user-fee provisions; a failed strategy to access pharmaceutical products, by respecting unnecessary Trade in Intellectual Property Rights provisos; and, most importantly, glaring insufficiencies in reducing Africa's foreign debt. One reflection of the balance of forces between Washington financial agencies and African societies is the adoption of the New Partnership for Africa's Development at the urging of the South African and Nigerian governments. While the WHO has helped to research, publicize, and criticize the problems associated with durable neoliberalism in African health care, it also continues to make serious mistakes as it remains locked within the paradigm. A human rights perspective being developed by the African Social Forum is, in contrast, consistent with broader international trends in the opposition to corporate globalization.

Behavioral Health Services in the Changing Landscape of Private Health Plans

OBJECTIVE

Health plans play a key role in facilitating improvements in population health and may engage in activities that have an impact on access, cost, and quality of behavioral health care. Although behavioral health care is becoming more integrated with general medical care, its delivery system has unique aspects. The study examined how health plans deliver and manage behavioral health care in the context of the Affordable Care Act (ACA) and the 2008 Mental Health Parity and Addiction Equity Act (MHPAEA). This is a critical time to examine how health plans manage behavioral health care.

METHODS

A nationally representative survey of private health plans (weighted N=8,431 products; 89% response rate) was conducted in 2010 during the first year of MHPAEA, when plans were subject to the law but before final regulations, and just before the ACA went into effect. The survey addressed behavioral health coverage, cost-sharing, contracting arrangements, medical home innovations, support for technology, and financial incentives to improve behavioral health care.

RESULTS

Coverage for inpatient and outpatient behavioral health services was stable between 2003 and 2010. In 2010, health plans were more likely than in 2003 to manage behavioral health care through internal arrangements and to contract for other services. Medical home initiatives were common and almost always included behavioral health, but financial incentives did not. Some plans facilitated providers' use of technology to improve care delivery, but this was not the norm.

CONCLUSIONS

Health plans are key to mainstreaming and supporting delivery of high-quality behavioral health services. Since 2003, plans have made changes to support delivery of behavioral health services in the context of a rapidly changing environment.

Achieving Mental Health Care Parity Might Require Changes In Payments And Competition

One of the most prominent features of the Affordable Care Act has been the promotion of individual health plans chosen by consumers in the Marketplaces. These plans are subject to regulation and paid by risk-adjusted capitation, a set of policies known as managed competition. Individual health insurance markets, however, are vulnerable to what economists describe as efficiency problems stemming from adverse selection, and Marketplaces are no exception. Health plans have incentives to discriminate against services used by people with certain chronic illnesses, including mental health conditions. Parity regulations, which dictate coverage for mental health benefits on par with medical and surgical benefits, can eliminate discrimination in coverage but redirect discrimination toward hard-to-regulate tactics from managed care such as restrictive network design and provider payment. This article reviews policy options to contend with ongoing selection issues. "Better enforcement" of parity has less chance of success than more fundamental but feasible changes in the way plans are paid or in the way competition among plans is structured.

Impact of type 2 diabetes medication cost sharing on patient outcomes and health plan costs

OBJECTIVES

To study the association between cost sharing for diabetes medications, adherence, hospitalization rates, and healthcare costs, with relationship to patient risk.

STUDY DESIGN

A retrospective claims analysis of data from 35 large, private, self-insured employers (2004 to 2012).

METHODS

We examined outcomes for 92,410 patients aged 18 to 64 years with a type 2 diabetes (T2D) diagnosis who filled at least 1 T2D prescription. First, we examined the relationship between adherence, measured as the proportion of days covered, and cost sharing, measured as the out-of-pocket cost to purchase a pre-specified bundle of T2D prescriptions. We then examined the association between adherence and hospital days. Simulations showed the effect of increased cost sharing on adherence and inpatient utilization.

RESULTS

A $10 increase in out-of-pocket cost was associated with a 1.9% reduction in adherence (P < .01). In turn, a 10% reduction in adherence was associated with a 15% increase in per-patient hospital days (0.17 days; P < .01). For the average plan, switching from low to high cost sharing reduced per-patient medication costs by $242 and increased per-patient hospitalization costs by $342, for a net increase of $100 in plan costs. Increases in per-patient costs were greater for high-risk patients, such as those with heart failure ($1328).

CONCLUSIONS

Increased cost sharing for T2D medication was associated with reductions in pharmacy costs, but higher total costs for patients with T2D. This problem is particularly acute for patients with 1 or more cardiovascular comorbidities. The results suggest that increased diabetes cost sharing may hamper efforts to lower the total cost of diabetes care.

Changes in Consumer Cost-Sharing for Health Plans Sold in the ACA's Insurance Marketplaces, 2015 to 2016

This brief examines changes in consumer health plan cost-sharing--deductibles, copayments, coinsurance, and out-of-pocket limits--for coverage offered in the Affordable Care Act's marketplaces between 2015 and 2016. Three of seven measures studied rose moderately in 2016, an increase attributable in part to a shift in the mix of plans offered in the marketplaces, from plans with higher actuarial value (platinum and gold plans) to those that have less generous coverage (bronze and silver plans). Nearly 60 percent of enrollees in marketplace plans receive cost-sharing reductions as part of income-based assistance. For enrollees without cost-sharing reductions, average copayments, deductibles, and out-of-pocket limits remain considerably higher under bronze and silver plans than under employer-based plans; cost-sharing is similar in gold plans and employer plans. Marketplace plans are more likely than employer-based plans to impose a deductible for prescription drugs but no less likely to do so for primary care visits.

Premium copayments and the trade-off between wages and employer-provided health insurance

This paper estimates the trade-off between salary and health insurance costs using data on Illinois school teachers between 1991 and 2008 that allow us to address several common empirical challenges in this literature. Teachers paid about 17 percent of the cost of individual health insurance and about 46 percent of the cost of their family members' plans through premium contributions, but we find no evidence that teachers' salaries respond to changes in insurance costs. Consistent with a higher willingness to pay for insurance, we find that premium contributions are higher in districts that employ a higher-tenured workforce. We find no evidence that school districts respond to higher health insurance costs by reducing the number of teachers.

Consumer Cost-Sharing in Marketplace vs. Employer Health Insurance Plans, 2015

Using data from 49 states and Washington, D.C., we analyzed changes in cost-sharing under health plans offered to individuals and families through state and federal exchanges from 2014 to 2015. We examined eight vehicles for cost-sharing, including deductibles, copayments, coinsurance, and out-of-pocket limits, and compared findings with cost-sharing under employer-based insurance. We found cost-sharing under marketplace plans remained essentially unchanged from 2014 to 2015. Stable premiums during that period do not reflect greater costs borne by enrollees. Further, 56 percent of enrollees in marketplace plans attained cost-sharing reductions in 2015. However, for people without cost-sharing reductions, average copayments, deductibles, and out-of-pocket limits under catastrophic, bronze, and silver plans are considerably higher than under employer-based plans on average, while cost-sharing under gold plans is similar employer-based plans on average. Marketplace plans are far more likely than employer-based plans to require enrollees to meet deductibles before they receive coverage for prescription drugs.

Funding, coverage, and access under Thailand's universal health insurance program: an update after ten years

BACKGROUND

In 2001, Thailand implemented a universal coverage program by expanding government-funded health coverage to uninsured citizens and limited their out-of-pocket payments to 30 Baht per encounter and, in 2006, eliminated out-of-pocket payments entirely. Prior research covering the early years of the program showed that the program effectively expanded coverage while a more recent paper of the early effects of the program found that improved access from the program led to a reduction in infant mortality.

OBJECTIVE

We expand and update previous analyses of the effects of the 30 Baht program on access and out-of-pocket payments.

DATA AND METHODS

We analyze national survey and governmental budgeting data through 2011 to examine trends in health care financing, coverage and access, including out-of-pocket payments.

RESULTS

By 2011, only 1.64 % of the population remained uninsured in Thailand (down from 2.61 % in 2009). While government funding increased 75 % between 2005 and 2010, budgetary requests by health care providers exceeded approved amounts in many years. The 30 Baht program beneficiaries paid zero out-of-pocket payments for both outpatient and inpatient care. Inpatient and outpatient contact rates across all insurance categories fell slightly over time.

CONCLUSIONS

Overall, the statistical results suggest that the program is continuing to achieve its goals after 10 years of operation. Insurance coverage is now virtually universal, access has been more or less maintained, government funding has continued to grow, though at rates below requested levels and 30 Baht patients are still guaranteed access to care with limited or no out-of-pocket costs. Important issues going forward are the ability of the government to sustain continued funding increases while minimizing cost sharing.

National trends in the cost of employer health insurance coverage, 2003-2013

Looking at trends in private employer-based health insurance from 2003 to 2013, this issue brief finds that premiums for family coverage increased 73 percent over the past decade--faster than median family income. Employees' contributions to their premiums climbed by 93 percent over that time frame. At the same time, deductibles more than doubled in both large and small firms. Workers are thus paying more but getting less protective benefits. However, the study also finds that while premiums continued to rise through 2013, the rate of growth slowed between 2010 and 2013, following implementation of the Affordable Care Act. While families experienced slower growth in premium contributions and deductibles over this period, sluggish growth in median family income means families are paying more in premiums and deductibles as a share of their income than ever before.

Moral hazard and supplier-induced demand: empirical evidence in general practice

Changes in cost sharing and remuneration system in the Netherlands in 2006 led to clear changes in financial incentives faced by both consumers and general practitioner (GPs). For privately insured consumers, cost sharing was abolished, whereas those socially insured never faced cost sharing. The separate remuneration systems for socially insured consumers (capitation) and privately insured consumers (fee-for-service) changed to a combined system of capitation and fee-for-service for both groups. Our first hypothesis was that privately insured consumers had a higher increase in patient-initiated GP contact rates compared with socially insured consumers. Our second hypothesis was that socially insured consumers had a higher increase in physician-initiated contact rates. Data were used from electronic medical records from 32 GP-practices and 35336 consumers in 2005-2007. A difference-in-differences approach was applied to study the effect of changes in cost sharing and remuneration system on contact rates. Abolition of cost sharing led to a higher increase in patient-initiated utilisation for privately insured consumers in persons aged 65 and older. Introduction of fee-for-service for socially insured consumers led to a higher increase in physician-initiated utilisation. This was most apparent in persons aged 25 to 54. Differences in the trend in physician-initiated utilisation point to an effect of supplier-induced demand. Differences in patient-initiated utilisation indicate limited evidence for moral hazard.

From the city to the bush: increases in patient co-payments for medicines have impacted on medicine use across Australia

AIM

To determine whether the national declines in prescription medicine use occurring after the 2005 21% increase in co-payments affected all areas of Australia or were specific to remote and disadvantaged areas.

METHODS

Observed dispensing of proton pump inhibitors (PPIs) and statins were obtained for 1392 statistical local areas (SLA) of Australia in 2004 and 2006. Expected dispensing was based on national dispensing rates and was age standardised to each SLA. Expected dispensing for 2006 was based on pre-2005 prescription trends. Ratios of observed to expected dispensing (dispensing ratios) for each SLA were calculated. Mean dispensing ratios for each medicine and year were calculated for all remoteness and disadvantage groups. Generalised regression models compared the percentage change in dispensing ratios from 2004 to 2006.

RESULTS

Between 2004 and 2006 PPI dispensing fell significantly in major cities (-13.7%, 95% CI=-17.3--9.8), inner regional (-14.0, 95%CI=-19.5--8.2), outer regional (-14.6%, 95%CI=-19.9--9.0) and remote areas (-9.4%, 95%CI=-16.4--1.8). Statin dispensing fell in all groups but the most remote (range 6-7%). When focussing on disadvantage, PPI dispensing fell significantly in all groups (range 12-15%). Statins dispensing did not fall significantly in the most disadvantaged areas (-2.9%, 95%CI=-8.6-3.2) but did in the least (-6.5%, -11.3--1.5) and second-least (-5.8, -10.5--0.9) disadvantaged areas. Dispensing of PPIs and statins in the most remote and disadvantaged areas remained substantially below levels expected for Australia after the 21% co-payments increase.

CONCLUSIONS

The findings suggest that the 2005 21% in patient co-payments adversely affected prescription medicine use in all areas of Australia and was not specific to remote or disadvantaged areas. Indeed, dispensing of statins fell significantly in all but the most remote and disadvantaged areas, and the existing gap in dispensing of PPIs and statins was not widened by the co-payments increase. PPIs, which are used at above-prevalence rates in Australia and have cheaper over-the-counter substitutes available, were more sensitive to co-payment increases than were statins.

State trends in premiums and deductibles, 2003-2011: eroding protection and rising costs underscore need for action

Rapidly rising health insurance premiums and higher cost-sharing continue to strain the budgets of U.S. working families and employers. Analysis of state trends in private employer-based health insurance from 2003 to 2011 reveals that premiums for family coverage increased 62 percent across states--rising far faster than income for middle- and low-income families. At the same time, deductibles more than doubled in large and small firms. Workers are thus paying more but getting less-protective benefits. If trends continue at their historical rate, the average premium for family coverage will reach nearly $25,000 by 2020. The Affordable Care Act's reforms should begin to moderate costs while improving coverage. But with private insurance costs projected to increase faster than incomes over the next decade, further efforts are needed. If annual premium growth slowed by one percentage point, by 2020 employers and families would save $2,029 annually for family coverage.

[European evolution of the copayment in health costs: possible developments and reorganization proposals for Italian health care system. The role of additional kind of assistance]

The ticket, once considered just dissuasive or control instrument, has become citizens sharing of the costs of activities, services and performance of NHS. The difficult economic situation, that applies the main European countries, is leading in Italy to an increase measures of copayment. The use of over-sharing may drive, however, to important consequences in terms of equity, efficiency and cost containment of health. Copayment does not reduce the overall burden of spending, because often counterbalanced by a concomitant increase in private spending. In fact, Italian private expenditure on health "out of pocket" is the highest in Europe and more Italians discover the "low cost health care." The Authors propose to limite the introduction of new ticket or exacerbate the existing, focusing on the adherence of citizens to health and social integrative funds, that are now present on the national scene with about 5 million of members.

State trends in premiums and deductibles, 2003-2010: the need for action to address rising costs

Rapidly rising health insurance costs continue to strain the budgets of U.S. families and employers. This issue brief analyzes changes in private employer-based health premiums and deductibles for all states from 2003 to 2010, and finds total premiums for family coverage increased 50 percent across states and employee annual share of premiums increased by 63 percent over these seven years. At the same time, per-person deductibles doubled in large, as well as small, firms. If premium trends continue at the rate prior to enactment of the Affordable Care Act, the average premium for family coverage will rise 72 percent by 2020, to nearly $24,000. Health reform offers the potential to reduce insurance cost growth while improving financial protections. If efforts succeed in slowing annual premium growth by 1 percentage point, by 2020 employers and families together would save $2,161 annually for family coverage, compared with projected premiums at historical rates of increase.

Key findings from HSC's 2010 site visits: health care markets weather economic downturn, brace for health reform

Lingering fallout--loss of jobs and employer coverage--from the great recession slowed demand for health care services but did little to slow aggressive competition by dominant hospital systems for well-insured patients, according to key findings from the Center for Studying Health System Change's (HSC) 2010 site visits to 12 nationally representative metropolitan communities. Hospitals with significant market clout continued to command high payment rate increases from private insurers, and tighter hospital-physician alignment heightened concerns about growing provider market power. High and rising premiums led to increasing employer adoption of consumer-driven health plans and continued increases in patient cost sharing, but the broader movement to educate and engage consumers in care decisions did not keep pace. State and local budget deficits led to some funding cuts for safety net providers, but an influx of federal stimulus funds increased support to community health centers and shored up Medicaid programs, allowing many people who lost private insurance because of job losses to remain covered. Hospitals, physicians and insurers generally viewed health reform coverage expansions favorably, but all worried about protecting revenues as reform requirements phase in.

Patient cost-sharing and healthcare spending growth

In this paper, we explore the role patient incentives play in slowing healthcare spending growth. Evidence suggests that while patients do indeed respond to financial incentives, cost-sharing does not uniformly improve value; rather, cost-sharing provisions must be deliberately structured and targeted to reduce care of low marginal value. Other mechanisms may be helpful in targeting particular populations or types of utilization. The spillover effects between privately insured and publicly insured populations as well as market imperfections suggest a potential role for public policy in promoting insurance design that slows spending growth while increasing the health that each dollar buys.

Trends in patient cost sharing for clinical services used as quality indicators

BACKGROUND

Patient copayments for all medical services have increased dramatically. There are few data available regarding how copayments have changed for services commonly considered to be quality indicators.

OBJECTIVE

Describe the relative change in copayments for services used as quality indicators and interventions subject to programs to control utilization.

DESIGN

A large claims database was used to assess copayment changes from 2001 to 2006 for selected drug and non-drug services in patient cohorts with specific chronic diseases.

SUBJECTS

Approximately 5 million commercially-insured individuals enrolled in a variety of fee-for-service and capitated health plans.

MEASUREMENTS

Copayment trends were calculated as the change in the average amount paid per unit service from 2001 to 2006.

RESULTS

Out-of-pocket payments for services targeted by quality improvement initiatives increased substantially [>50%] and in a similar magnitude to interventions subject to programs to control their use. For prescription drugs, the trend was driven more by copayment increases for branded medications [$10 per prescription] than for generic drugs [$2 per prescription]. Copayments for non-drug preventive services rose modestly.

CONCLUSIONS

Benefit designers should consider reversing the trend of copayment increases for services considered to be indicators of high quality care.

Increasing copayments and adherence to diabetes, hypertension, and hyperlipidemic medications

OBJECTIVE

To examine the impact of a medication copayment increase on adherence to diabetes, hypertension, and hyperlipidemic medications.

STUDY DESIGN

Retrospective pre-post observational study.

METHODS

This study compared medication adherence at 4 Veterans Affairs medical centers between veterans who were exempt from copayments and propensity-matched veterans who were not exempt. The diabetes sample included 1069 exempt veterans and 1069 nonexempt veterans, the hypertension sample included 3545 exempt veterans and 3545 nonexempt veterans, and the sample of veterans taking statins included 2029 exempt veterans and 2029 nonexempt veterans. The main outcome measure was medication adherence 12 months before and 23 months after the copayment increase. Adherence differences were assessed in a difference-in-difference approach by using generalized estimating equations that controlled for time, copayment exemption, an interaction between time and copayment exemption, and patient demographics, site, and other factors.

RESULTS

Adherence to all medications increased in the short term for all veterans, but then declined in the longer term (February-December 2003). The change in adherence between the preperiod and the postperiod was significantly different for exempt and nonexempt veterans in all 3 cohorts, and nonadherence increased over time for veterans required to pay copayments. The impact of the copayment increase was particularly adverse for veterans with diabetes who were required to pay copayments.

CONCLUSION

A $5 copayment increase (from $2 to $7) adversely impacted medication adherence for veterans subject to copayments taking oral hypoglycemic agents, antihypertensive medications, or statins.

Mental health and substance abuse insurance parity for federal employees: how did health plans respond?

A fundamental concern with competitive health insurance markets is that they will not supply efficient levels of coverage for treatment of costly, chronic, and predictable illnesses, such as mental illness. Since the inception of employer-based health insurance, coverage for mental health services has been offered on a more limited basis than coverage for general medical services. While mental health advocates view insurance limits as evidence of discrimination, adverse selection and moral hazard can also explain these differences in coverage. The intent of parity regulation is to equalize private insurance coverage for mental and physical illness (an equity concern) and to eliminate wasteful forms of competition due to adverse selection (an efficiency concern). In 2001, a presidential directive requiring comprehensive parity was implemented in the Federal Employees Health Benefits (FEHB) Program. In this study, we examine how health plans responded to the parity directive. Results show that in comparison with a set of unaffected health plans, federal employee plans were significantly more likely to augment managed care through contracts with managed behavioral health "carve-out" firms after parity. This finding helps to explain the absence of an effect of the FEHB Program directive on total spending, and is relevant to the policy debate in Congress over federal parity.

Protect the sick: health insurance reform in one easy lesson

In thinking about how to expand insurance coverage, the issue that matters is whether insurance enables sick and high-risk people to get medical care. Over the course of three decades, market-oriented insurance reforms have shifted more costs of illness onto people who need and use medical care. By making the users of care pay for it (or even some of it), cost-sharing discourages sick people from getting care, even if they have insurance, and for people with low-incomes and tight budgets, cost-sharing can effectively deny them access to care. Thus, covering or not covering sick people is the core issue of health insurance reform, both as a determinant of support and opposition to proposals, and as the proper yardstick for evaluating reform ideas.