How do Premiums and Cost Sharing Affect Low-Income People in Medicaid?
A new issue brief from the Kaiser Family Foundation reviews what the research shows about the effects of premiums and cost sharing on low-income populations in Medicaid and the Children’s Health Insurance Program (CHIP), drawing upon 65 peer-reviewed studies and government and research and policy organization reports and studies published between 2000 and March 2017.
The review comes at a time when some state and federal policymakers have proposed allowing state Medicaid programs to charge higher premiums and cost sharing of enrollees, either through changes in law or new Medicaid waivers. Proponents of increasing these costs say that it will promote personal responsibility, prepare people to transition to private insurance and prompt consumers to be conscious of value in making health and health care decisions.
The review of the research shows that premiums serve as a barrier to obtaining and maintaining coverage for low-income individuals, particularly for those with the most limited incomes. It also shows that even relatively small levels of cost sharing of $1 to $5 are associated with reduced utilization of services, including vaccines and preventive and primary care, and negative health outcomes, such as increased rates of uncontrolled hypertension and reduced treatment for children with asthma. Further, the research suggests that state budget savings from premiums and cost sharing in Medicaid and CHIP are limited and offset by administrative expenses, increased disenrollment from coverage and increased use of more expensive services, such as emergency room care. Research also finds premiums and cost sharing can put pressures on safety net providers, with increases in uninsured patients in hospital emergency rooms and community health centers. Specific effects on individuals, providers, and state costs depend on how premiums and cost sharing are structured and implemented.