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Explore implications of escalating cost-sharing models on patient out-of-pocket expenses by income and health status, based on actuarial research from the 1997 MEPS data calibrated to current spending. Various scenarios and their impact on healthcare costs analyzed. Understand how different levels of cost-sharing options can affect financial burden, especially for seriously ill individuals and low-income workers. The presentation by John Bertko sheds light on the complexities and challenges in managing cost-sharing structures in healthcare.
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Patient Cost Sharing: How Much Is Too Much? Sally Trude December 3, 2003
Patient Cost Sharing • Employer response to rising premiums • Incremental increases from different levels • Analysis of effect on out-of-pocket costs • By income • By health status
Actuarial Models of Cost-sharing • Actuarial Research Corporation • Jim Mays and Monica Brenner • 1997 MEPS calibrated to reflect 2003 spending
Spectrum of Cost-sharing Options 6 scenarios • 2 copayment options • Low copayment • High copayment • 4 coinsurance and deductible options • $100, 10% in network / 20% out of network • $500, 20% / 30% • $1000, 20% / 30% • $2500, 30% / 50%
Overall Average Out-of-Pocket Costs Increase With Higher Cost Sharing
Percent Exceeding $1500 Per Year Increase with High Cost Sharing
Implications • Financial burden increases for seriously ill and low income workers. • Limits employers’ use of tool. • Need for refinements to target discretionary care. • Practitioner involvement required.
