One way the reform act intends to reduce the number of uninsured people is by expanding Medicaid eligibility. Medicaid is a joint state/federal program, but the expansion will be mostly paid for by the federal government, at least initially. Nonetheless, Medicaid is the single program causing the most budgetary stress for states. In an effort to control costs, many are exploring the idea of greater beneficiary cost-sharing. Traditionally their has been little cost-sharing in the program, because the recipients are supposedly poor and unable to afford premiums, deductibles and copays. This has meant, however, that there is no incentive for enrollees to either be thoughtful about their health care use or take better care of their health. A Kaiser Family Foundation report examines the research on the effects of Medicaid cost-sharing. (KFF Brief) Many beneficiaries are also in poorer health than their privately insured counterparts, so they may have more need for health services, and premiums or cost-sharing may limit their access to needed services. While Federal law has generally constrained cost-sharing of any type, a proposed rule issued by HHS in January of this year would give states more flexibility.
The research shows, as might be expected, that premiums or enrollment fees deter participation in Medicaid or cause disenrollment if they are added and that deductibles and copays deter use of services, including what might be viewed as high-value, necessary services. Many low-income people who aren’t in Medicaid turn to use of emergency rooms. The report paints a fairly dire picture of the results of any cost-sharing, but much is based solely on surveys. It also suggests that having low-income people not enroll in Medicaid or not seek needed services due to cost-sharing is harmful to providers, who end up rendering more uncompensated care. There is a larger fairness issue at work, however. Why should Medicaid enrollees receive richer health insurance that the working population, whose taxes are paying for Medicaid? Many Medicaid enrollees engage in very poor health behavior–diet, smoking, alcohol and drug use–that drives up costs; in general there is often a lack of self-responsibility. Without financial incentives, it is very unlikely that these behaviors will change. Why should the general public pay for the irresponsibility of anyone?