Consumers are starting to pay a larger share for high priced drugs. According to the N.Y. Times (”Co-payments“), insurance companies “…are charging patients a percentage of the cost of certain high-priced drugs, usually 20 to 33 percent, which can amount to thousands of dollars a month.” Medicare’s drug plans have introduced new fee schedules where patients pay larger copayments for Tier 4 and Tier 5 drugs. Private insurers now followed Medicare’s lead.
Should consumers bear a larger burden of their health care costs? On the one hand, moving towards more out-of-pocket costs will reduce premiums. Further, higher co-payments will reduce moral hazard (i.e., the use of unnecessary medical care simply because insurance pays for it). Also, this moves us closer toward insurance as a policy to insure people against catastrophic risk and not as a mechanism to pay for all medical care.
Still, health economist James Robinson from UC-Berkeley states that “It is very unfortunate social policy. The more the sick person pays, the less the healthy person pays.”
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April 14, 2008 at 5:56 pm
Aaron
I guess it all depends on how you define ‘catastrophic risk’; I felt like the article portrayed these higher co-payments as not in the spirit of insurance. In other words, it read like expensive drugs were part of what insurance should cover, and not just a part of medical care that people should be expected to pay for themselves.