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.”