Understanding the Impact of Medicaid Premiums & Cost-Sharing: Updated Evidence from the Literature and Section 1115 Waivers
Issue Brief
Amy Finkelstein, Nathaniel Hendren, and Mark Shepard, "Subsidizing Health Insurance for Low-Income Adults: Evidence from Massachusetts," American Economic Review 109 no. 4 (April 2019): 1530-67, https://doi.org/10.1257/aer.20171455
Coleman Drake and David M. Anderson, "Terminating Cost-Sharing Reduction Subsidy Payments: The Impact Of Marketplace Zero-Dollar Premium Plans On Enrollment," Health Affairs 39 no. 1 (January 2020): 41-49, https://doi.org/10.1377/hlthaff.2019.00345
Seth Freedman, Lilliard Richardson, and Kosali I. Simon, "Learning From Waiver States: Coverage Effects Under Indiana’s HIP Medicaid Expansion," Health Affairs 37 no. 6 (June 2018): 936-943, https://www.healthaffairs.org/doi/10.1377/hlthaff.2017.1596
Betsy Q. Cliff, Sarah Miller, Jeffrey T. Kullgren, John Z. Ayanian, and Richard Hirth, Adverse Selection in Medicaid: Evidence from Discontinuous Program Rules (National Bureau of Economic Research, Working Paper No. 28762, May 2021), https://www.nber.org/papers/w28762
Natoshia M. Askelson et al., "Purged from the Rolls: A Study of Medicaid Disenrollment in Iowa," Health Equity 3 no. 1 (December 2019): 637-643, https://doi.org/10.1089/heq.2019.0093
Brendan Saloner et al., "Access to Care Among Individuals Who Experienced Medicaid Lockouts After Premium Nonpayment," Jama Network Open 2 no. 11 (November 2019), https://doi.org/10.1001/jamanetworkopen.2019.14561
Rohan Khera et al., "Association of Out-of-Pocket Annual Health Expenditures With Financial Hardship in Low-Income Adults With Atherosclerotic Cardiovascular Disease in the United States," JAMA Cardiology 3 no. 8 (August 2018): 729-738, https://doi.org/10.1001/jamacardio.2018.1813
Uriel Kim, Johnie Rose, and Siran Koroukian, "Access and Affordability in Low- to Middle-Income Individuals Insured Through Health Insurance Exchange Plans: Analysis of Statewide Data," Journal of General Internal Medicine 34 (January 2019): 792-795, https://link.springer.com/article/10.1007/s11606-019-04826-w
Charles Stoecker, Alexandra M. Stewart, and Megan C. Lindley, "The Cost of Cost-Sharing: The Impact of Medicaid Benefit Design on Influenza Vaccination Uptake," Vaccines 5 no. 1 (March 2017): 8, https://doi.org/10.3390/vaccines5010008
Amitabh Chandra, Evan Flack, and Ziad Obermeyer, The Health Costs of Cost-Sharing (National Bureau of Economic Research, Working Paper No. 28439, February 2021), https://www.nber.org/papers/w28439
Kurt J. Lavetti, Thomas DeLeire, and Nicolas R. Ziebarth, How Do Low-Income Enrollees in the Affordable Care Act Marketplaces Respond to Cost-Sharing? (National Bureau of Economic Research, Working Paper No. 26430, November 2019), https://www.nber.org/papers/w26430
Kelly C. Young-Wolff et al., "Evaluating the Impact of Eliminating Copayments for Tobacco Cessation Pharmacotherapy," Medical Care 56 no. 11 (November 2018): 912-918, https://doi.org/10.1097/MLR.0000000000000987
David L. Rabin, Anuradha Jetty, Stephen Petterson, Ziad Saqr, and Allison Froehlich, "Among Low-Income Respondents With Diabetes, High-Deductible Versus No-Deductible Insurance Sharply Reduces Medical Service Use," Diabetes Care 40 no. 2 (February 2017): 239-245, https://doi.org/10.2337/dc16-1579
J. Frank Wharam et al., "Diabetes Outpatient Care and Acute Complications Before and After High-Deductible Insurance Enrollment: A Natural Experiment for Translation in Diabetes (NEXT-D) Study," Jama Internal Medicine 177 no. 3 (March 2017): 358-368, https://doi.org/10.1001/jamainternmed.2016.8411
J. Frank Wharam et al., "Vulnerable And Less Vulnerable Women In High-Deductible Health Plans Experienced Delayed Breast Cancer Care," Health Affairs 38 no. 3 (March 2019): 408-415, https://doi.org/10.1377/hlthaff.2018.05026
J. Frank Wharam et al., "Effect of High-Deductible Insurance on High-Acuity Outcomes in Diabetes: A Natural Experiment for Translation in Diabetes (NEXT-D) Study," Diabetes Care 41 no. 5 (May 2018): 940-948, https://doi.org/10.2337/dc17-1183
Vanessa K. Dalton et al., "Trends in Birth Rates After Elimination of Cost Sharing for Contraception by the Patient Protection and Affordable Care Act," JAMA Network Open 3 no. 11 (November 2020): https://doi.org/10.1001/jamanetworkopen.2020.24398
Jalpa A. Doshi, Pengxiang Li, Sunita Desai, and Steven C. Marcus, "Impact of Medicaid Prescription Copayments on Use of Antipsychotics and Other Medications in Patients with Schizophrenia," Journal of Medical Economics 12 (August 2017): 1252-1260, https://doi.org/10.1080/13696998.2017.1365720
Deliana Kostova and Jared Fox, "Chronic Health Outcomes and Prescription Drug Copayments in Medicaid," Medical Care 55 no. 5 (May 2017): 520-527, https://doi.org/10.1097/MLR.0000000000000700
Amitabh Chandra, Evan Flack, and Ziad Obermeyer, The Health Costs of Cost-Sharing (National Bureau of Economic Research, Working Paper No. 28439, February 2021), https://www.nber.org/papers/w28439
Rachel E. Barenie, Aaron S. Kesselheim, Theodore Tsacogianis, and Michael Fischer, "Associations Between Copays, Coverage Limits for Opioid Use Disorder Medications, and Prescribing in Medicaid, 2018," Medical Care 59 no. 3 (March 2021): 266-272, https://doi.org/10.1097/MLR.0000000000001494
Kelly C. Young-Wolff et al., "Evaluating the Impact of Eliminating Copayments for Tobacco Cessation Pharmacotherapy," Medical Care 56 no. 11 (November 2018): 912-918, https://doi.org/10.1097/MLR.0000000000000987
David L. Rabin, Anuradha Jetty, Stephen Petterson, Ziad Saqr, and Allison Froehlich, "Among Low-Income Respondents With Diabetes, High-Deductible Versus No-Deductible Insurance Sharply Reduces Medical Service Use," Diabetes Care 40 no. 2 (February 2017): 239-245, https://doi.org/10.2337/dc16-1579
Vanessa K. Dalton et al., "Trends in Birth Rates After Elimination of Cost Sharing for Contraception by the Patient Protection and Affordable Care Act," JAMA Network Open 3 no. 11 (November 2020): https://doi.org/10.1001/jamanetworkopen.2020.24398
Deliana Kostova and Jared Fox, "Chronic Health Outcomes and Prescription Drug Copayments in Medicaid," Medical Care 55 no. 5 (May 2017): 520-527, https://doi.org/10.1097/MLR.0000000000000700
Amitabh Chandra, Evan Flack, and Ziad Obermeyer, The Health Costs of Cost-Sharing (National Bureau of Economic Research, Working Paper No. 28439, February 2021), https://www.nber.org/papers/w28439
J. Frank Wharam et al., "Diabetes Outpatient Care and Acute Complications Before and After High-Deductible Insurance Enrollment: A Natural Experiment for Translation in Diabetes (NEXT-D) Study," Jama Internal Medicine 177 no. 3 (March 2017): 358-368, https://doi.org/10.1001/jamainternmed.2016.8411
J. Frank Wharam et al., "Effect of High-Deductible Insurance on High-Acuity Outcomes in Diabetes: A Natural Experiment for Translation in Diabetes (NEXT-D) Study," Diabetes Care 41 no. 5 (May 2018): 940-948, https://doi.org/10.2337/dc17-1183
Salam Abdus and Patricia S. Keenan, "Financial Burden of Employer-Sponsored High-Deductible Health Plans for Low-Income Adults With Chronic Health Conditions," Jama Internal Medicine 178 no. 12 (December 2018): 1706-1708, https://doi.org/10.1001/jamainternmed.2018.4706
Kurt J. Lavetti, Thomas DeLeire, and Nicolas R. Ziebarth, How Do Low-Income Enrollees in the Affordable Care Act Marketplaces Respond to Cost-Sharing? (National Bureau of Economic Research, Working Paper No. 26430, November 2019), https://www.nber.org/papers/w26430
Amy Finkelstein, Nathaniel Hendren, and Erzo F. P. Luttmer, "The Value of Medicaid: Interpreting Results from the Oregon Health Insurance Experiment," Journal of Political Economy 127 no. 6 (December 2019), https://doi.org/10.1086/702238
Alon Peltz, Amy J. Davidoff, Cary P. Gross, and Marjorie S. Rosenthal, "Low-Income Children With Chronic Conditions Face Increased Costs If Shifted From CHIP To Marketplace Plans," Health Affairs 36 no. 4 (April 2017): 616–625, https://doi.org/10.1377/hlthaff.2016.1280
Uriel Kim, Johnie Rose, and Siran Koroukian, "Access and Affordability in Low- to Middle-Income Individuals Insured Through Health Insurance Exchange Plans: Analysis of Statewide Data," Journal of General Internal Medicine 34 (January 2019): 792-795, https://link.springer.com/article/10.1007/s11606-019-04826-w
Rohan Khera et al., "Association of Out-of-Pocket Annual Health Expenditures With Financial Hardship in Low-Income Adults With Atherosclerotic Cardiovascular Disease in the United States," JAMA Cardiology 3 no. 8 (August 2018): 729-738, https://doi.org/10.1001/jamacardio.2018.1813
J. Frank Wharam et al., "Vulnerable And Less Vulnerable Women In High-Deductible Health Plans Experienced Delayed Breast Cancer Care," Health Affairs 38 no. 3 (March 2019): 408-415, https://doi.org/10.1377/hlthaff.2018.05026
Amy Finkelstein, Nathaniel Hendren, and Mark Shepard, "Subsidizing Health Insurance for Low-Income Adults: Evidence from Massachusetts," American Economic Review 109 no. 4 (April 2019): 1530-67, https://doi.org/10.1257/aer.20171455
Additionally, CMS also issued approval for a premiums provision in Kentucky's KY HEALTH waiver on January 12, 2018. However, this waiver approval was set aside by a federal district court prior to implementation and Democratic Governor Andy Beshear subsequently notified CMS that the state had terminated this waiver on December 16, 2019.
An exception is for non-emergent use of the emergency room (ER). A small number of states have requested or received CMS approval to charge co-payments exceeding statutory limits assessed for non-emergent use of the ER. See KFF Section 1115 waiver tracker for more details.
A study on tobacco premium surcharges in the ACA Marketplaces found that among adults 138% to 400% FPL, these surcharges reduced coverage but did not increase smoking cessation.
In Montana, for each month on average in 2019, only about one in five waiver enrollees were subject to premiums (about 18,900 out of 96,200 total enrollees), as most enrollees were below 50% FPL (71,400 enrollees) and a small number met other exemptions to premium requirements (5,900 enrollees). Of those enrollees who were subject to premiums, 59% were between 50% and 100% FPL (11,100 enrollees) and 41% were above 100% FPL (7,800 enrollees).
Montana’s waiver report does not provide the number of annual unduplicated enrollees. Thus, for this estimate we use as a denominator the monthly average number of enrollees subject to coverage loss (non-exempt enrollees above 100% FPL), which is about 7,800 enrollees.
Iowa’s waiver reports do not provide the number of annual unduplicated enrollees. Thus, for this estimate we use as a denominator the monthly average number of enrollees subject to coverage loss (non-exempt enrollees above 100% FPL), which is about 14,200 enrollees.
Iowa’s waiver reports do not provide the number of annual unduplicated enrollees. Thus, for this estimate we use as a denominator the monthly average number of enrollees subject to debt collection for premium nonpayment (all enrollees subject to premiums), which is about 48,800 enrollees.
More recent data from Michigan indicates that as of March 2021, about 281,800 beneficiaries owed past due premiums or co-payments, and about 27% of these were in “consistent failure to pay” status, subjecting them to garnishment. However, although Michigan is still charging and collecting premiums during the COVID-19 PHE, during this time the state is not referring beneficiaries to the Department of Treasury for debt collection for any unpaid premiums.
In Montana, 75% of current enrollees and 66% of “disenrollees” (individuals disenrolled for failure to pay premiums) knew that monthly premiums were dependent on income. 43% of enrollees and 34% of disenrollees knew they could pay missed premiums within a 90-day grace period to retain coverage, 26% of enrollees and 19% of disenrollees knew they could pay after 90 days and reenroll, and 28% of enrollees and 40% of disenrollees knew that unpaid premiums could be collected against future tax refunds.