For seniors, higher copays may have hidden costs

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© Don Mason/Corbis

Even among Americans with health insurance, getting adequate medical care can mean facing some financial hurdles. According to some estimates, as many as 25 million Americans are “underinsured,” or technically have health insurance, but cannot afford the copayments, deductibles and other fees that represent the gap between their insurance coverage and their total medical costs. And as health care costs continue to rise, this gap may grow—insurance companies are looking for ways to offset ballooning expenses, including raising patient copays. But, while the higher front-end payments may seem like a simple short-term solution, according to a study published in the New England Journal of Medicine, when it comes to elderly patients, the approach is also short-sighted. In a study of nearly 900,000 seniors on Medicare, researchers found that, higher copays deterred routine doctor’s visits, resulting in more emergency care and costly hospital stays.

The study analyzed medical records for 899,060 seniors enrolled in 36 different Medicare insurance plans between 2001 and 2006. In the study group, copayments increased for both primary and specialty care visits, from an average of $7.38 to $14.38, and $12.66 to $22.05, respectively. In the control group, plan copays remained consistent. In the first year after copays went up, there was a dramatic decrease in routine, out-patient doctor’s visits: for every 100 patients, there were 20 fewer outpatient visits, compared with the control group. What’s more, compared with patients whose copays remained the same, average hospital admissions increased (2.2 additional admissions per 100 patients), as did inpatient treatment days (13.4 more days per 100 patients). Among patients who lived in lower-income, lower-education areas, the impact of higher copays was even more significant.

While previous study has shown that increasing copays and deductibles among younger patients was an effective cost-sharing method, these findings add to earlier research suggesting that increased copays—even seemingly small increases of $5 to $10—serve as a significant deterrent for elderly patients. And, as older patients skip routine visits to save money, those missed opportunities for prevention and early intervention may increase the risk for more costly treatments later. According to the authors’ estimates, increasing copays could save an insurance plan some $7,150 per every 100 enrollees. Yet, if, as the study suggests, missed opportunities for preventive care mean more patients are admitted to the hospital, the estimated $24,000 in hospital expenses for every 100 enrollees dwarfs any potential savings gained by upping copays. As the authors conclude: “Increasing copayments for ambulatory care among elderly patients may have adverse health consequences and may increase spending for health care.”