The Effects of Premiums and Cost Sharing on Low-Income Populations: Updated Review of Research Findings

Table 2: Effects of Cost Sharing

National Studies
State Studies

Table 2: Effects of Cost Sharing
Citation  Data Study Population(s) Study Focus and Major Findings
National Studies
Charles Stoecker, Alexandra M Stewart, and Megan C Lindley, “The Cost of Cost-Sharing: The Impact of Medicaid Benefit Design on Influence Vaccination Uptake,” Vaccines 5, 8, (March 2017). Behavioral Risk Factor Surveillance System (BRFSS) data, 2003-2012 Nonelderly adult Medicaid enrollees receiving care on a fee-for-service basis
  • Examines the effects of three aspects of Medicaid benefit design—coverage for vaccines, prohibiting cost sharing, and copayment amounts—on vaccine uptake among nonelderly adults enrolled in fee-for-service Medicaid.
  • Medicaid copayment charges negatively affected influenza vaccination levels. Each additional dollar of copayment for vaccination decreased influenza vaccination coverage by 1-6 percentage points.
Deliana Kostova and Jared Fox, “Chronic Health Outcomes and Prescription Drug Copayments in Medicaid,” Medical Care published ahead of print (February 2017). National Health and Nutrition Examination Survey (NHANES) data, 1999-2012. Adults age 20-64 enrolled in Medicaid in 18 states and those not enrolled in Medicaid with family incomes at or below 250% FPL who were identified to have hypertension or hypercholesterolemia
  • Evaluates the association between prescription drug copayments and uncontrolled hypertension, uncontrolled hypercholesterolemia, and prescription drug utilization among Medicaid beneficiaries with these conditions.
  • Introducing drug copayments to Medicaid beneficiaries with hypertension or hypercholesterolemia was associated with a rise in the average rates of uncontrolled hypertension and uncontrolled hypercholesterolemia by 7.7 and 13.2 percentage points, respectively. These copayment estimates translate into a relative increase of 15% in uncontrolled hypertension and 25% in uncontrolled hypercholesterolemia.
  • Introducing drug copayments also resulted in a 9.2 percentage point reduction in the average rate of taking medication among persons with hypercholesterolemia, while the resulting reduction among patients taking anti-hypertension medication was smaller and not statistically significant.
Lindsay M. Sabik and Sabina Ohri Gandhi, “Copayments and Emergency Department Use Among Adult Medicaid Enrollees,” Health Economics 25 (May 2016):529-542. National Hospital Ambulatory Medical Care Survey (NHAMCS) and state-level data, 2001-2009 Nonelderly adult Medicaid enrollees
  • Examines the effect of copayments on non-urgent emergency department utilization among nonelderly adults enrolled in Medicaid.
  • Results suggest copayments for non-emergent use of the emergency department may reduce non-urgent visits. When a copayment is in place, there is a statistically significant 6.3 percentage point decrease in the probability that a given visit is non-urgent, compared to when there is no copayment.
Mona Siddiqui, Eric T Roberts, and Craig E Pollack, “The Effects of Emergency Department Copayments for Medicaid Beneficiaries Following the Deficit Reduction Act of 2005,” JAMA Internal Medicine 175,3 (March 2015):393-398. Medical Expenditure Panel Survey (MEPS) data, January 2001 to December 2010 Adult Medicaid enrollees
  • Evaluates effect of allowing states to enforce emergency department copayments for non-urgent visits on emergency department utilization among Medicaid beneficiaries and compares the effects among beneficiaries living in states that did and did not adopt emergency department copayments.
  • Results suggest that copayments for non-emergent use of the emergency department did not affect use of the emergency department. There were no significant differences in the rate of emergency department visits per enrollee in states with copayments compared to states without copayments.
  • The findings also suggest that the non-emergent use of emergency department copays did not affect rates of outpatient medical provider visits or use of inpatient care.
Vicki Fung, et. al., “Financial Barriers to Care Among Low-Income Children with Asthma: Health Care Reform Implications,” JAMA Pediatrics 168, 7 (July 2014):649-656. 2012 Telephone survey of 769 parents Children between ages 4-11 with asthma
  • Examines the associations between cost sharing, income, use of care, and financial stress among children with asthma.
  • Overall, findings show that cost-related barriers to care among children with asthma were concentrated among low-income families with higher cost sharing levels.
  • Among parents with incomes at or below 250% FPL, those with lower cost sharing levels were less likely than those with higher cost sharing levels to delay or avoid taking their children to a physician’s office visit (3.8% vs. 31.6%) and to delay or avoid using the emergency department (1.2% vs. 19.4%) because of cost. Higher income parents and children enrolled in public coverage were also less likely to forgo care for their children compared to parents with incomes at or below 250% FPL who had high cost sharing levels.
  • Overall, 15.6% of parents borrowed money or cut back on necessities to pay for their children’s asthma care. Families with incomes at or below 250% FPL with higher levels of cost sharing were more likely than those with lower cost sharing to borrow money to pay for their children’s asthma care.
Jessica Greene, Rebecca M Sacks, and Sara B McMenamin, “The Impact of Tobacco Dependence Treatment Coverage and Copayments in Medicaid,” American Journal of Preventive Medicine 46, 4 (April 2014):331-336. Current Population Survey  (CPS) Tobacco Use supplement data, 2001-2003, 2006-2007, and 2010-2011 Adults enrolled in Medicaid who reported smoking 12 months prior to the survey and lived in 28 states with consistent tobacco dependence treatment coverage across Medicaid fee-for-service and managed care.
  • Examines whether more generous tobacco dependence treatment (TDT) coverage, in terms of cost sharing requirements and treatment covered, is associated with greater likelihood of quit attempts and successful quit rates.
  • States with the most generous Medicaid TDT coverage (pharmacotherapy with copayment and counseling without copayment) had the highest successful quit rates (9.1%) and the highest proportion of quit attempts that were successful (20.3%).
  • Data suggest that when cost sharing was required for counseling, quit rates were lower than when cost sharing was not required. However, the findings were not statistically significant.
Gery P Guy Jr., “The Effects of Cost Sharing on Access to Care among Childless Adults.” Health Services Research 45, 6 Pt. 1 (December 2010): 1720-1739. Behavioral Risk Factor Surveillance System (BRFSS) data, 1997–2007 Nonelderly adults
  • Analyzes the impacts of public health expansions and differences in cost sharing requirements on insurance status and receipt of preventive screening and physician services.
  • Results indicate that childless adult expansion programs resulted in significant gains in coverage regardless of cost sharing requirements.
  • However, cost sharing requirements were found to play an important role in providing access to preventive health screenings. Use of preventive health screenings significantly increased among childless adults eligible for programs with traditional Medicaid cost sharing levels. In programs with higher cost sharing, there were no statistically significant gains in screening utilization.
  • Differences in cost sharing levels did not appear to impact the likelihood of having a personal doctor or health care provider or prevent adults from seeking needed medical care.
Karoline Mortensen, “Copayments Did Not Reduce Medicaid Enrollees’ Nonemergency Use of Emergency Departments,” Health Affairs 29, 9 (September 2010): 1643-1650 . Medical Expenditure Panel Surveys (MEPS) data, 2001-2006 Nonelderly adults enrolled in Medicaid
  • Examines how changes in nine states’ copayment policies influence enrollees’ use of emergency departments.
  • Requiring copayments for nonemergency visits did not decrease emergency department use by Medicaid enrollees.
State Specific Studies Back to top
Leah Zallman, et. al., “Affordability of Health Care Under Publicly Subsidized Insurance After Massachusetts Health Care Reform: A Qualitative Study of Safety Net Patients,” International Journal for Equity in Health 14 (October 2015):112. Face to face interviews with 12 individuals Massachusetts: Individuals with Medicaid or subsidized coverage (Commonwealth Care) at a safety net hospital emergency department
  • Examines whether cost sharing levels in public insurance programs in Massachusetts led to unaffordability of care.
  • Individuals with higher cost sharing requirements described difficulties affording care, inability to get needed medical care due to cost, inability to afford other basic needs (e.g., rent, food, being unable to return to college) due to paying for medical care, and the need to rely on non-insurance based resources in order to pay for medical care.
  • Difficulty obtaining medical care was less common among those with low cost sharing. In fact, most low cost sharing participations reported no difficulty affording their care and the problems that were reported were of smaller magnitude compared to those with higher cost sharing. Individuals with lower cost sharing did not report inability to afford other basic needs.
  • For both higher and lower cost sharing participants, inability to afford care was associated with needing to rely on other sources, e.g., loans from family or friends, providers’ willingness to accept late payments, enrollment in other government programs.
Leah Zallman,, “Perceived Affordability of Health Insurance and Medical Financial Burdens Five Years in to Massachusetts Health Reform,” International Journal for Equity in Health 14 (October 2015):113. Face to face surveys Massachusetts: A sample of 976 patients seeking care at three hospital emergency departments
  • Compares perceived affordability of insurance, financial burden, and satisfaction among individuals with low cost sharing public plans (Medicaid enrollees, and enrollees in Exchange-based plans with minimal cost sharing) and individuals with high cost sharing public plans (enrollees in Exchange-based plans with high cost sharing and commercially insured individuals).
  • Despite having higher incomes, individuals with higher cost sharing requirements were less satisfied with their insurance plans and perceived more difficulty affording their insurance than those with a low cost sharing plan. Individuals with a higher cost sharing public plan also reported more difficulty affording care as well as insurance premiums compared to those with commercial insurance.
  • Patients with low cost sharing public plans reported higher plan satisfaction and less financial concern than the commercially insured.
Daniel A Lieberman, et. al., “Unintended Consequences of a Medicaid Prescription Copayment Policy,” Medical Care 52, 5 (May 2014):422-427. State-level aggregate medication utilization data from the Center for Medicare and Medicaid Services (CMS), 2007-2011 Massachusetts: Prescription medication utilization in Massachusetts Medicaid
  • Evaluates copayment policies implemented in Massachusetts Medicaid intended to incentivize the use of selected generic medications. In 2009, Massachusetts kept copayments for certain target generics at $1 while it increased copayments for all non-targets to $2-$3.
  • The increase in copayments modestly increased utilization of target generic medications. However, it had unintended consequences for other medications. In particular, the policy decreased and subsequently eliminated incentives for patients to use generic rather than brand name drugs among all other medication classes. After policy implementation, use of non-target essential generics decreased and use of name brand medications increased.
Bisakha Sen, et. al., “Can Increases in CHIP Copayments Reduce Program Expenditures on Prescription Drugs?,” Medicare & Medicaid Research Review 4, 2 (May 2014). State administrative and claims data, 1999-2007 Alabama: Children enrolled in CHIP
  • Explores whether prescription expenditures by enrollees changed in Alabama’s CHIP program after copayment increases. In FY 2004, Alabama increased copayments for several non-preventive services, including prescription drugs, in its CHIP program. The magnitude of the increases varied across incomes, with lower fees in the 101-150% FPL group and higher fees in 151-200% FPL group.
  • The copay increase is associated with a statistically significant reduction in utilization for all prescription drugs (5.8%), brand name drugs (7%), and generic drugs (7.4%). However, there is substantial variation in responsiveness to the increased copayments across categories of drugs.
  • There is evidence of larger declines in utilization and expenditures among children with no chronic conditions versus those with chronic conditions, and of larger reductions among children between 101-150% FPL versus 150-200% FPL.
Amitabh Chandra, Jonathan Gruber and Robin McKnight, “The Impact of Patient Cost-Sharing on Low-Income Populations: Evidence from Massachusetts,” Journal of Health Economics 33 (2014): 57-66. State enrollment and claims data, July 2007-June 2009 Massachusetts: Adults enrolled in Massachusetts Commonwealth Care, a state-funded program that subsidizes insurance for families with incomes <300% FPL
  • Examines the effects of increased copayments on low-income adults enrolled in the Massachusetts Commonwealth Care program.
  • A 10% increase in copayments faced by patients would reduce utilization by 1-2 percentage points.
  • Utilization among individuals with greater health needs appears to be less sensitive to copayments than those with fewer health needs.
James Marton, et. al., “The Effects of Medicaid Policy Changes on Adults’ Service Use Patterns in Kentucky and Idaho,” Medicare & Medicaid Research Review 2, 4 (February 2013). State administrative data, 2004-2008 Kentucky: Nonelderly, non-institutionalized adults enrolled in Medicaid
  • Examines the impact of Medicaid policy changes implemented in Kentucky and Idaho on utilization of services, including increases in cost sharing requirements in Kentucky. Kentucky introduced new cost sharing in its Medicaid program in 2006, including a $50 copayment for inpatient hospitalization, 5% coinsurance for nonemergency use of the ER, $1–$3 copayments for prescription drugs, and $3–$6 copayments for physician visits.
  • New cost sharing requirements did not appear to have a substantial impact on service use in Kentucky. Authors note that reimbursement increases to providers introduced a year later may have neutralized the negative effects of the copayments. In addition, the extent to which these copayments were actually collected by providers at the point of service is not clear.
Bisakha Sen, et. al., “Did Copayment Changes Reduce Health Service Utilization among CHIP Enrollees? Evidence from Alabama,” Health Services Research 47, 4 (September 2012):1303-1620. State administrative data, 1999-2009 Alabama: Children enrolled in CHIP
  • Explores whether health care utilization changed among enrollees in Alabama’s CHIP program following copayment increases. At the beginning of FY 2004, Alabama increased copayments for children enrolled in its CHIP program.
  • There are significant declines in utilization for inpatient care, physician visits, brand-name medications, and emergency department visits following the copayment increases.
  • Given that the copayment increases were mostly $3-$5, the study shows that even small increases in copayments may have significant effects on service utilization.
Sujha Subramanian, “Impact of Medicaid Copayments on Patients with Cancer,” Medical Care 49, 9 (September 2011): 842-847. Medicaid administrative data linked with cancer registry data, 1999-2004 Georgia: Low-income nonelderly adult Medicaid enrollees diagnosed with cancer
  • Studies the impact of increased copayments in Georgia on nonelderly adult Medicaid beneficiaries with cancer. In 2002, Georgia significantly increased copayments for prescription drugs and other services. The experiences in Georgia are compared to experiences in two control states, South Carolina and Texas.
  • After the implementation of copay changes in Georgia, there was a substantial decrease in prescription drug use, while there was no decline in South Carolina or Texas. In Georgia, those with multiple comorbidities had larger reductions in their prescription use compared to those with a single comorbidity and those with no comorbidities. Patients with multiple comorbidities in South Carolina and Texas increased their prescription use.
  • The probability of having an emergency room visit increased in Georgia while the probability did not change in neither South Carolina nor Texas.
  • Authors conclude that copayments do not decrease Medicaid cost of care for patients with cancer, but may instead lead to unintended negative consequences and that the results show that even relatively small copayments impact utilization among Medicaid beneficiaries.
Marisa Elena Domino, et. al., “Increasing Time Cost and Copayments for Prescription Drugs: An Analysis of Policy Changes in a Complex Environment,” Health Services Research 46, 3 (June 2011):900-919. Medicaid claims data from CMS, 2000- 2002 North Carolina: Nonelderly adults enrolled in Medicaid
  • Estimates the effects of policy changes in the North Carolina Medicaid program on medication adherence and expenditures. The North Carolina Medicaid program decreased the allowable supply per prescription from 100 days to 34 days on July 1, 2001, and then increased the copayment for brand name drugs in October 2001.
  • Both policies decreased medication adherence. The reduction in allowable days supply had a much larger effect on adherence than the copayment increase. Data also find an increase in the probability of filling medications from the copayment policy, but authors suggest this may be due to medication switches that might bring individuals to the pharmacy more often.
Bill J Wright, et. al., “Raising Premiums and Other Costs for Oregon Health Plan Enrollees Drove Many to Drop Out,” Health Affairs 29, 12 (December 2010):2311-2316. Survey, 2003, 2004, and 2005 Oregon: Low-income adult Medicaid recipients with incomes under 100% FPL
  • Examines effects of premium and cost sharing increases for poor adults enrolled in Oregon’s Medicaid program. In 2003, Oregon made a range of policy changes to its Medicaid program, the Oregon Health Plan (OHP), which included benefit reductions, increased premiums and cost sharing and stricter premium payment policies for adults enrolled in its OHP Standard program. Enrollees in OHP Plus continued to receive benefits similar to the original OHP.
  • OHP Standard enrollees were nearly twice as likely to have unmet health care needs and cost was a more significant driver of unmet need than for Plus enrollees.
  • OHP Standard enrollees were less likely to have had a primary care or emergency room visit than Plus members, but were 68% more likely to have indicated financial strain due to medical costs.
Robert A Lowe, et. al., “Impact of Policy Changes on Emergency Department Use by Medicaid Enrollees in Oregon,” Medical Care 48,7 (July 2010): 619-627. State administrative data, 2001-2004. Oregon: Low-income nonelderly adults enrolled in Medicaid
  • Examines effects of premium and cost sharing increases for poor adults in Oregon affected emergency department use. In 2003, Oregon made a range of policy changes to its Medicaid program, the Oregon Health Plan (OHP), which included benefit reductions, increased premiums and cost sharing and stricter premium payment policies for adults enrolled in its OHP Standard program. Enrollees in OHP Plus continued to receive benefits similar to the original OHP. These changes included $50 copayments for emergency department use.
  • Following the change, emergency department utilization among OHP Standard enrollees dropped 18% compared to OHP Plus enrollees who did not have a copay increase for emergency department care. The rate of emergency department visits leading to hospitalization fell 24% and patterns for injury-related visits and psychiatric visits excluding chemical dependency exhibit a similar pattern to overall emergency department visits.
  • Additional analysis finds increases in inpatient costs and increases in cost per emergency department visits. The authors note that these additional findings suggest that the decrease in emergency department visits that led to hospitalizations may reflect OHP Standard enrollees deferring necessary care as much as they defer optional care.
Joel F Farley, “Medicaid Prescription Cost Containment and Schizophrenia: A Retrospective Examination,” Medical Care 48, 5 (May 2010): 440-447. CMS Medicaid Analytical Extract Data Files, 2001-2003 Mississippi: Medicaid patients with schizophrenia
  • Examines the effects of Medicaid policy changes in Mississippi on compliance to anti-psychotic medications and mental health care utilization and payments among patients with schizophrenia. In 2002, Mississippi enacted several policies to curb prescription spending, including increasing prescription copayments from $1 to $3 per brand and instituting a cap of seven prescriptions per month, a 34-day supply limitation, and a 5% reduction in dispensing fees.
  • After the changes, patients in Mississippi were 4.87% less compliant with antipsychotic treatments and experienced 20.5% more antipsychotic treatment gaps than patients in control states. There also was a 3.7% reduction in outpatient mental health visits and a 4.2% reduction in mental health care payments.
Daniel M Hartung, et. al., “Impact of a Medicaid Copayment Policy on Prescription Drug and Health Services Utilization in a Fee-for-service Medicaid Population,” Medical Care 46, 6 (June 2008):565-572. State claims data, 2002- 2004


Oregon: Non-pregnant adults (parents receiving Temporary Assistance for Needy Families, individuals with disabilities, and elderly individuals) enrolled in Medicaid, receiving care on a fee-for-service basis
  • Assesses the impact of increased copayments for prescription drugs on medication and health services utilization among Medicaid enrollees in Oregon with certain chronic conditions. In 2003, Oregon implemented new copay requirements, including $2 for generic drugs, $3 for brand name drugs, and $3 for outpatient services.
  • Utilization of all prescription drugs decreased significantly by 17.2% immediately after the policy change, and there was no significant change in the overall trend. This finding suggests that the impact of the copay was immediately realized and sustained. However, because the trend did not change, there was not continued decline over time.
  • The impact of the copay differed across drug classes. The smallest decrease was among use of cardiovascular medications and the largest decreases were in use of drugs for depression (20%) and respiratory disease (19%).
  • Immediately following the policy change, patients with diabetes, respiratory disease, depression, and schizophrenia had smaller reductions in use of drugs for their conditions compared to non-indicated drugs. However, trend data suggest that, although patients may have initially resisted reducing use of medication for their condition, over the longer term this medication use was reduced.
  • Overall, there were no significant changes in utilization observed in outpatient office visits, hospitalizations, and emergency room encounters.
Gene LeCouteur, Michael Perry, Samantha Artiga and David Rousseau, The Impact of Medicaid Reductions in Oregon: Focus Group Insights, (Washington, DC: Kaiser Commission on Medicaid and the Uninsured, December 2004). Focus groups, 2004 Oregon: Adults enrolled in Medicaid with incomes under 100% FPL
  • Assesses the impacts of policy changes in Oregon’s Medicaid program on poor adults. In 2003, Oregon made a range of policy changes to its Medicaid program, the Oregon Health Plan (OHP), which included benefit reductions, increased premiums and cost sharing and stricter premium payment policies for adults enrolled in its OHP Standard program. Enrollees in OHP Plus continued to receive benefits similar to the original OHP.
  • Many respondents indicated that the copayments were difficult to afford and impeded access to needed care and prescription drugs. Others noted that the small copayments added up quickly when ongoing care or multiple medications were needed.
Leighton Ku, et. al., The Effects of Copayments on the Use of Medical Services and Prescription Drugs in Utah’s Medicaid Program, (Washington, DC: Center on Budget and Policy Priorities, November 2004). Utah Department of Health (UDOH) data, 2001-2002 Utah: Adults enrolled in Medicaid
  • Examines the effect of copayment increases in Utah’s Medicaid program. In 2001 and 2002, Utah began imposing copayments in its Medicaid program for low-income parents, as well as for low-income senior citizens and people with disabilities. The state subsequently increased copayments for certain groups.
  • The analysis showed that copays resulted in significant reductions in utilization of services, including physician and inpatient services, although an earlier Utah Department of Health study had shown no significant changes in utilization of these services. In contrast to the earlier analysis, this analysis used a new model that assumed either a flat or positive trend in utilization absent policy changes to determine if copays significantly affected utilization.
Office of the Executive Director, 2003 Utah Public Health Outcome Measures Report, (Salt Lake City, UT: UT Department of Health, December 2003), ambul_db/db/pdflibrary/ DBfile_49007.pdf Medicaid Administrative Data 2001-2003 and Medicaid Benefits Survey 2003 Utah: Adults enrolled in Medicaid
  • Examines the effect of copayment increases in Utah’s Medicaid program. In 2001 and 2002, Utah began imposing copayments in its Medicaid program for low-income parents, as well as for low-income senior citizens and people with disabilities. The state subsequently increased copayments for certain groups.
  • Copay requirements had no statistically significant impact on utilizations except in a few cases: prescriptions and outpatient claims.
  • For a subset of the population, the copays for physician services and pharmacy created a financial burden. While some enrollees reported getting needed dental care by paying for it themselves, a greater number had dental needs that were not addressed, primarily due to inability to pay.
Table 1: Effects of Premiums Table 3: Effects on State Budgets & Providers

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