ICYMI: The New York Times Highlights How Increasing Cost Sharing Hinders Access, Raises Other Health Care Costs

Allyson Funk   |     May 5, 2015   |   SHARE THIS

ChloeYesterday, on The Upshot, Incidental Economist creator Austin Frakt explored the impact of high cost-sharing on consumers and other health care costs. He reiterates concerns we’ve been highlighting on AccessBetterCoverage.org: high out-of-pocket costs and restrictions on prescription drug coverage create barriers to access, undermine the fundamental purpose of insurance and increase other health care costs.

Here are some key takeaways:

  • In 2014, 41 percent of insured workers had at least a $1,000 deductible. That’s more than four times the number in 2006. Frakt says, “Hidden in the numbers is the fact that increasing cost sharing for patients with chronic illnesses can backfire, causing their health care spending to go up, not down.”
  • A recent National Bureau of Economic Research study found that when cost sharing for prescription drugs is higher, patients tend to cut back or go without.
  • Further, cost sharing may limit prescription spending, while increasing other health care costs. Here’s Frakt: “When applied indiscriminately, cost sharing can hurt the sicker patients by prompting them to delay or avoid the preventive care they need. A 2012 study showed that higher cost sharing reduces spending on physician visits and drugs, but can increase hospital spending.”
  • Finally, Medicare and the Congressional Budget Office have recognized the cost of these tradeoffs. Frakt makes two points:
    • “When Medicare beneficiaries face higher cost sharing, hospitalizations go up, not down, especially for those with chronic illnesses.”
    • “In 2012 the Congressional Budget Office changed how it assesses the budget implications of Medicare policy proposals. If proposed Medicare legislation would decrease prescription drug use (e.g., by increasing cost sharing), it increases its estimate of overall Medicare spending to account for higher hospitalization costs the program would have to finance.”

Consumers are concerned about patient access to needed medicines and it’s time to address those concerns. Putting all medicines for chronic conditions on the highest cost-sharing tier or increasing deductibles is not the answer. Barriers to accessing needed medicines hurt patients and increase costs in the health care system.

Visit AccessBetterCoverage.org for more information about the barriers patients face when trying to access the medicines they need. 

Allyson Funk

Allyson Funk Ally is a former senior director of public affairs at PhRMA focused on advocacy issues for the biopharmaceutical industry. Her expertise includes Medicare, Medicaid, 340B, health reform and more. Prior to PhRMA, her experience includes leading health communications for a large membership organization, supporting public affairs clients and working for the governor of Louisiana.

Topics: coverage, out of pocket costs, Access Better Coverage

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