Insurers Lose More Than They Gain In Raising Medical Co-pays for Older Americans

Raising co-pays leads older Americans to bypass necessary care and increases hospital use, according to a Jan. 28, 2010, report in the New England Journal of Medicine at www.nejm.org.

“Raising cost sharing for ambulatory care among elderly patients may have adverse health consequences and may increase total spending on health care,” stated Amal N. Trivedi, M.D., M.P.H., Husein Moloo, M.P.H., and Vincent Mor, Ph.D., in the article.

The authors compared changes in the use of outpatient and inpatient care related to 899,060 beneficiaries enrolled in 36 Medicare plans from 2001 through 2006. During that time, plans that increased payments almost doubled them for ambulatory care, from $7.38 to $14.38, and specialty care, from $12.66 to $22.05. The year following an increase in co-payments saw 19.8 fewer annual outpatient visits per 100 enrollees, and 2.2 additional annual hospital admissions. The strongest correlations between higher co-payments and lower outpatient visits existed among enrollees living in lower income areas and the ones with hypertension, diabetes or a history of myocardial hypertension.

“In conclusion, increasing copayments for ambulatory care reduced the use of outpatient care among elderly enrollees in managed-care plans, but this decline was offset by an increase in hospitalizations, particularly among enrollees with low socioeconomic status and those with chronic disease,” concluded the authors.