One of the fundamental policy issues being faced in the healthcare field in America relates to medical care prices. In this case, privately insured Americans are increasingly facing health plan deductibles, which is a provision that increases the exposure of individuals to financial risk, including the risk of foregone or delayed care. On the other hand, the implementation of the Affordable Care Act (ACA) was related to the reduction of out-of-pocket spending, primarily for low-income individuals. However, measuring people’s responsiveness to medical care prices is a fundamental health economic issue as well as a vital component in the design and regulation of health insurance in America (Beik, 2013). An assessment of the appropriate combination of healthcare supply and demand policies depends on the manner in which consumers respond to the concept of cost-sharing.
One of the policy features of the American healthcare system is the concept of cost-sharing. According to Beik (2013), cost sharing refers to the unreimbursed amounts that participants in a particular healthcare plan should pay when using healthcare services. This concept has increasingly become an essential feature of health plans. For instance, in the United States, the increasing cost of healthcare has influenced a considerable number of employers to increase provisions related to cost-sharing health plans (Beik, 2013). Additionally, the rising costs have led to the implementation of consumer-driven plans. Even though the cost-sharing plans were put in place to reduce the use of unnecessary health services and influence consumers to be cost-conscious, the provision discourages Americans from using needed health care. For this reason, the policy can be inequitable for the low-income population and the extremely sick individuals.
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A larger percentage of Americans with health insurance contribute to the premiums associated with their health coverage. Conversely, the participants have different levels of out-of-pocket responsibility in cases such as when they are hospitalized, when visiting a physician, or when they are seeking other medical services. Employers have also increased their use of patient cost sharing. The reason for the increase emanates from the provision that they are interested in controlling the health care costs that relate with plans they might be offering their employees, including the need to provide their employees with incentives that can influence them to enroll to tightly controlled plans (Beik, 2013). The cost-sharing policy constitutes the primary feature of a considerable number of proposals on healthcare reform.
Discussions on the cost-sharing policy focus on elements such as coinsurance, deductibles, out-of-pocket payments, and copayments. The policy addresses provisions such as the liability for the fees paid to physicians that exceed the reimbursement covered by a particular health care plan referred to as balance billing (Qingyue, Liying & Beibei, 2011). The other provision under the policy relates to the care received for patients with a preexisting condition or when waiting for an employee or a dependent to be eligible to cover. On the other hand, the policy centers on the uncovered services, which include experimental treatments, speech therapy, occupational therapy, physical therapy, and vision and healing healthcare services. These types of care can influence the questioning of whether the cost sharing policy can reduce the utilization of care by promoting cost-effective care, consequently discouraging people from using unnecessary medical services.
Medicare is one of the social insurance plans administered by the American government. This social insurance program provides health insurance coverage to individuals above the age of 65 years. However, the program also covers individuals below the stated age that have permanent physical disabilities, those that have congenital physical disabilities, or those that meet particular criteria as outlined in the program. For instance, a review by Qingyue, Liying, and Beibei, (2011) includes some changes that characterize the use of mammography screen as well as ED visits for a particular group of patients that have been affected by the copayment policy included in the cost-sharing provision. The study brings to light the idea that a copayment option amounting to $10 reduced the screening rates by slightly more than 8%. Conversely, the study revealed that the biennial screening rates were decreased by 9% (Qingyue, Liying, & Beibei, 2011). Furthermore, the study indicates that a $20 to $50 copayment policy reduced ED visits by 4% (Qingyue, Liying, & Beibei, 2011). The researchers made the comparison with the changes realized through cost sharing. The changes reveal that cost-sharing policies target different types of cost sharing methods that are inclusive of changes from copayment to deductibles, or copayment to coinsurance.
Regardless of whether an individual is insured, several limitations on their particular coverage can prevent them from accessing care. According to the Institute of Medicine (IOM) (2003), a considerable number of insured individuals have limited benefits, which is a provision that exposes them to restrictions to accessing some services as well as high out-of-pocket expenses. However, whether an individual is insured through a public or private plan, they are likely to enjoy some services. The services include access to preventive services, oral health care, as well as behavioral healthcare (IOM, 2003). When individuals access these services, they can experience limits that do not relate to their treatment needs since the coverage for these services is presumably stricter than services offered in other programs. For instance, the cost-sharing services might be higher for these services compared to those provided for other types of care.
In addition to the increase in the healthcare costs as determined by the cost-sharing requirements, it is possible to determine that access to care might be affected by the elements that characterize cost sharing as well as copayments. For instance, cost sharing reduces the healthcare use for self-limited or insignificant conditions. Different studies take note of the idea that copayments can reduce people’s use of preventive as well as primary care services, primarily for the low-income population (IOM, 2003). One of the studies that provide this revelation is the RAND Health Insurance Experiment, which further reveals that copayments might not reduce the use of the preventive and primary care for the higher-income population (IOM, 2003). The effects might also affect people’s use of behavioral health care services. For this reason, a possible argument is that cost sharing might discourage people from seeking health care services during the early stages of their condition, consequently preventing the surveillance of health issues such as infectious diseases. For this reason, the diagnosis and treatment of such conditions might be delayed, thereby threatening public health.
Concerning the determination of whether the cost sharing policy can control medical expenditures, it would be vital to assess the rates with which coinsurance has affected the expenses. According to the United States Congress (1993), coinsurance requirements have been known to reduce the total health care spending significantly Rand Health Insurance Experiment. In this case, the coinsurance requirements prevent people from accessing health care. Participants of the Rand Health Insurance Experiment with no cost-sharing incurred 23% higher healthcare expenditures annually compared to 25% of participants that subject to coinsurance (United States Congress, 1993). Conversely, those without cost sharing spent 46% more healthcare costs annually, compared to 95% of the coinsured participants (United States Congress, 1993). The identified costs might be used to indicate that the long-term cost implications deter the use of healthcare services that are potentially effective.
In conclusion, it is vital to take note of the idea that the cost-sharing policy affects different facets of healthcare delivery, including the attached medical costs and access to health care. The cost-sharing policy can be understood as the unreimbursed amounts that participants in a particular healthcare plan should pay when using healthcare services. The policy was put in place to reduce people's use of unnecessary health services, including the need to make people aware of healthcare costs. Regardless of the intention of the policy development, the assessment provides that it has discouraged a considerable number of Americans from using necessary health care services. Findings from the analysis also revealed that the policy could be inequitable for the low-income population and the extremely sick individuals. Conversely, the Institute of Medicine (U.S.) refers to different studies to reveal that copayments can reduce low-income groups from using preventive and primary care services while the high-income group's use of the same will remain unchanged. Regarding access to healthcare, the analysis has pointed out that the cost-sharing policy contains provisions that prevent individuals from accessing care, primarily if their condition is in its early stages since the affected population deems the access to healthcare as unnecessary. However, cost sharing the total health care spending in the nation’s healthcare system.
References
Beik, J. I. (2013). Health insurance today: A practical approach . St. Louis, Mo: Elsevier.
Institute of Medicine (U.S.). (2003). The future of the public's health in the 21st century . Washington, D.C: National Academies Press.
Qingyue, M., Liying, J., & Beibei, Y. (2011). Cost-sharing mechanisms in health insurance schemes: A systematic review. Center for Health Management and Policy, Shandong University.
United States Congress. (1993). Benefit design: patient cost sharing . DIANE Publishing.
