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JAMA study casts doubt on proposal to charge seniors home health copays to compel cut back on frequency of use

Study found no evidence that imposing a copayment reduced the use of home healthcare, would increase out-of-pocket costs.

Jeff Lagasse, Associate Editor

In hopes of reducing Medicare spending, some policymakers have proposed charging seniors a copay for home-based care, with the idea that senior citizens will use it less if it isn't free. A new study in JAMA Internal Medicine, however, casts doubt on that premise.

The study found no evidence that imposing a copayment reduced the use of home healthcare, instead showing that a copay policy would increase out-of-pocket costs for homebound seniors, with little impact on utilization for certain services.

Last year, Republicans in the U.S. House of Representatives and former President Barack Obama, a Democrat, both proposed copays for the currently free Medicare benefit, citing rapid increases in home healthcare spending. The presumed reduction in seniors' usage, plus the copay revenues, would recoup $1.3 billion to Medicare over 10 years, they estimated.

[Also: Home health worker shortage fueled by low wages, demanding duties threatens patient care in numerous states]

To determine whether that was true, the authors gathered reams of data to analyze what has happened when private Medicare Advantage plans assessed copays for the benefit.

The study is based on the anonymous records of more than 290,000 seniors -- 135,302 in copay plans and 155,892 in non-copay plans. Of those, 10,417 people in copay plans used home healthcare, as did 11,629 in non-copay plans. For comparisons between plans, the researchers statistically controlled for factors such as enrollee age, race, gender and income.

The copays varied from $5 to $20 a visit. Because home care episodes typically involve many visits, that amounted to an estimated annual out-of-pocket cost of $165 to $660 per senior.

[Also: MedPAC recommends 5% payment cut to home health agencies, inpatient rehab facilities]

Despite those added costs, seniors in copay plans did not reduce their use of the benefit, according to several measures. The year after copays were imposed, there was no significant reduction in the proportion of seniors using home care, and there was no significant reduction in either care episodes or in total days of care.

The researchers tracked how many seniors left their Medicare Advantage plans altogether. They found that the more seniors used home healthcare, the more likely they were to leave their plan. So rather than give up home care, the authors said, seniors may have instead chosen to avoid copays by fleeing the plans that charged one.

Were a new federal copay policy to take hold, fleeing to a plan with no copay would no longer be possible. But the evidence still suggests that seniors would not reduce their home care usage.

[Also: Texas doctor convicted in $40 million Medicare home health fraud, faces decades in prison]

Instead, the evidence shows that seniors' demand for home healthcare has little flexibility. Many seniors in the study were willing to stick with home care despite copays that were much higher than what lawmakers had proposed; the proposals called for $100 per episode, which would impose less out-of-pocket cost than almost any of the Medicare Advantage plans studied.

If seniors don't reduce their home care usage and instead endure the fees, it would raise copay money for Medicare, according to the study, but it would all come out of the pockets of seniors, regardless of their ability to pay.

Other studies have shown that when unavoidable healthcare costs mount, seniors often cut back on non-medical expenses such as food, housing, transportation and personal care.

Twitter: @JELagasse

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