Consequences of Health Insurance Cost Sharing Among Low‐Income Medicare Beneficiaries: Evidence from Benefit Cliffs in Medicaid and Medicare’s Prescription Drug Subsidy Program

摘要

Cost sharing is intended to mitigate the effects of moral hazard in health insurance but can have unintended consequences if patients underuse medically beneficial care that is subject to out‐of‐pocket costs. The Medicare program requires substantial cost sharing, including deductibles and coinsurance for outpatient care and prescription drugs. However, little is known about the consequences of this benefit design for low‐income Medicare beneficiaries who do not qualify for Medicaid or Part D Low‐Income Subsidies (LIS), which defray these costs. In this study, we harnessed quasi‐random variation in exposure to Medicare cost sharing, resulting from “cliffs” in cost sharing subsidies above vs. below income eligibility thresholds for Medicaid and the LIS, to assess the effects of cost sharing on low‐income beneficiaries’ out‐of‐pocket spending and use of care.