Cost sharing in Medicaid

There’s a new Perspective in the NEJM that touches on it, entitled “Pinching the Poor? Medicaid Cost Sharing under the ACA“.

We’ve written about the moral hazard, the RAND HIE, and cost-sharing’s effect on spending so many times, I’ve lost count. I even did a Healthcare Triage video on it (down below). No one contends that increased cost-sharing will reduce health care spending, in most situations. There are exceptions, of course. For a long time, many have desired to increase cost-sharing in Medicaid, where it’s almost non-existent, in an effort to give people more “skin in the game”. The authors question, though, whether Medicaid recipients have much skin to give:

Beneath the rhetoric, questions remain about whether more cost sharing in Medicaid is desirable policy. Cost sharing could represent a substantial financial burden for people living near the poverty level. A no-frills monthly budget for a single adult with a child in most parts of the United States has been estimated to be more than $1,300: $300 for food, $600 for rent, $400 for transportation, and potentially more for child care and taxes. On an income of $1,300 a month, a family of two (living just above the federal poverty line) may not have the resources to afford a $30 monthly Medicaid premium, as plans in Michigan and Iowa could require. With multiple prescriptions and provider visits, such a family could easily incur an additional $20 per month in costs under some state proposals.

I’ve been thinking a lot about cost-sharing, specifically with Medicaid. Soon, I hope to write a more in-depth piece about it with some thoughts on how we might use it most thoughtfully. But as a number of states use the Medicaid expansion as an opportunity to try and get HHS to carve out exceptions to their “no cost-sharing” Medicaid policies, I expect this kind of movement will continue.

Go read the whole thing.


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