- Study Finds Cost-Sharing Increases Can be Deadly
- Center Hosts Sen. Chris Murphy and Provides Important Health Care Reminders for March
- Advocates Call for Comprehensive Oral Health Coverage
- Register Now – 2021 National Voices of Medicare Summit & Sen. Jay Rockefeller Lecture
A recent study supports the Center for Medicare Advocacy’s long-held concern about increasing out-of-pocket costs for Medicare beneficiaries. In summary, requiring beneficiaries to pay more of their own money will not make them savvier consumers; instead it will lead beneficiaries to forgo necessary care.
The theory in health economics of “skin in the game” is based on the assumption that individuals will be more likely to shop around and carefully select services, providers, medications and other spending related to health care if they have a personal financial stake. The theory goes that if consumers have to spend more of their own money, they will limit wasteful spending on inappropriate health services, thereby reducing overall health expenditures. The aim of requiring beneficiaries to pay for care is to incentivize high-value health care. A premise for this theory is that because consumers will limit spending for health care that was not really necessary, “skin in the game” policies will not lead to worse health outcomes.
However, the Center has long stated that because health care spending by patients is unlike other consumer spending, policies based on this theory could lead to disastrous health outcomes. A new National Bureau of Economic Research working paper validates this concern.
The Health Costs of Cost-Sharing looked at price variations in Medicare Part D in the first year a beneficiary has Medicare in order to simulate an essentially random increase in costs for medications, and trace that to mortality rates. Because drug benefits are not pro-rated, people with birthdays earlier in the year are more likely to see a big increase in cost-sharing in their first year on Medicare than those born later in the year. The study explained,
“[e]very January, beneficiaries start the year paying 25% out-of-pocket for drugs; but when they reach approximately $2500 of total drug consumption, they pay 100% out-of-pocket for the next drug. . . plan thresholds are not pro-rated in beneficiaries’ first calendar year of enrollment, and eligibility for enrollment begins in the month beneficiaries turn 65. So those born in later months of the year enroll in later months of the year, and in turn have less time to reach thresholds, meaning they face lower prices on average.”
The study found that raising Medicare beneficiaries’ out-of-pocket costs by just over $10 per prescription led to a 23% drop in overall drug consumption, and to a 33% increase in mortality. It also found that patients made large cutbacks in critical life-saving drugs, not just in “low-value” drugs, even if those were high-risk decisions based on their specific health needs. For example, people at high risk for heart attacks or strokes cut back on statins and blood-pressure medications even more than lower-risk patients. The study also found that when beneficiaries “were faced with higher prices, [they] choose to fill no drugs—no matter how many drugs they were on prior to the price shock, or their individual health risks.”
The study concludes that “patient cost-sharing introduces large and deadly distortions into the cost-benefit calculus.”
The Center for Medicare Advocacy works to advance access to Medicare and necessary home and community-based care, through education and advocacy. As part of this work, with support from the Jeffrey P. Ossen Foundation, the Center hosted a virtual town hall with Connecticut Senator Chris Murphy on February 24, 2021. In addition to presenting an overview of current issues, Sen. Murphy, took time to answer questions on topics ranging from Medicare Advantage networks and overpayments to gaps in Medicare coverage; he also touched on Social Security, the Affordable Care Act, and the Postal Service. The Center for Medicare advocacy is grateful for Senator Murphy’s participation, dedication to Medicare and health care, and remarkable work in the United States Senate.
In addition, attendees were reminded of several important health care opportunities for March:
- Medicare Advantage Open Enrollment through March 31 – Beneficiaries enrolled in an MA plan can:
- Change from a Medicare Advantage plan to a different Medicare Advantage plan
- Change from a Medicare Advantage plan to Traditional (Original) Medicare
- Medicare Savings Program (MSP) Income Eligibility Rates Update March 1
- MSPs help Medicare lower-income beneficiaries pay all or some of Medicare costs (premiums, deductibles, and/or co-payments).
- Contact your local SHIP program for more information
- Affordable Care Act Special Enrollment Period
- If currently uninsured and not Medicare eligible
- Nationally, expanded enrollment period is nationally through May 15, 2021 (Check your state for possible variations in dates – for example, in Connecticut, the enrollment period is extended through March 15, with possible extension.)
Center for Medicare Advocacy attorney Kata Kertesz recently joined oral health colleagues in calling for comprehensive oral health coverage in a piece on Health Affairs Blog.
Featured in Health Affairs Blog, on February 23, 2021. Contributing authors Melissa Burroughs, Danny A. Kalash, Colin Reusch, Ifetayo B. Johnson, Kata M. Kertesz.
Medicare & Health Care:
Where We’ve Been, Where We Are, Where We Need to Be
Virtual Presentation, by Webinar
Thursday April 1, 2021, 1:00 PM EDT- 4:00 PM EDT
We are pleased to welcome 2021 Sen. Jay Rockefeller Lecturer, Dr. Donald Berwick.
Dr. Berwick is one of the country’s leading advocates for high-quality health care, and one of the top thinkers in health care today. Dr. Berwick is currently President Emeritus and Senior Fellow at the Institute for Healthcare Improvement and previously Administrator of the Centers for Medicare & Medicaid Services.
We are also honored to present: Ben Belton (Director of Global Partner Engagement, AARP), Robert Espinoza (Vice President of Policy, PHI), Dr. Judith Feder (Georgetown University Professor and Center for Medicare Advocacy Board President), Chris Jennings (President, Jennings Policy Strategies), David Lipschutz (Associate Director, Center of Medicare Advocacy), Patricia Neuman (Vice President for Medicare, Kaiser Family Foundation), Senator Jay Rockefeller, and Judith Stein (Executive Director, Center for Medicare Advocacy).
Challenges and Opportunities Facing Medicare and Health Care in the New Administration and Congress
Acknowledging Health Disparities and Advancing Health Equity
To kick off the Center for Medicare Advocacy’s 35th Anniversary, and to make this program widely accessible in light of this challenging time, we are offering an early registration fee of only $35 through the end of February.