(Bloomberg View) — The goal of the Patient Protection and Affordable Care Act (PPACA) — Obamacare — to expand access to health care has been only half a success: More Americans have insurance, but a rise in cost sharing means fewer can use it. Copayments — those predetermined charges you pay at the doctor’s office — are a big part of the problem. In recent years, they’ve risen to the point where they no longer work as they’re meant to.
In theory, charging moderate fees to see a doctor or get a procedure gives people an incentive to consider whether they really need it. Done carefully, copays can thus reduce unnecessary spending, benefiting everyone.
That means the charges have to be just large enough to influence people’s decisions, and not so big as to keep people from getting the care they need. Yet copays have been going up significantly. In the past five years, the average price to see a primary care doctor has risen 20 percent. For a specialist it’s gone up 29 percent, and for outpatient surgery it’s up 43 percent. And that’s just for employer-sponsored insurance; on average, those covered through PPACA’s exchanges face even higher expenses.
No wonder 22 percent of people now say the cost of getting care has led them to delay treatment for a serious condition. That’s the highest percentage since Gallup started asking in 2001. Another poll found that as many as 16 million adults with chronic conditions have avoided the doctor because of out-of-pocket costs.
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The wisdom of copayments also relies on the notion that consumers understand the incentives the payments are supposed to impose. Yet almost two-thirds of Americans don’t know what costs they face for using an emergency room or a walk-in clinic, a recent survey found.
When copayments grow too big and confusing to be effective cost controls, they merely shift an ever-greater share of insurance costs away from premiums. And this undermines the basic purpose of insurance, which is to spread the risk of unforeseen costs across populations and over time — among not just the minority who need care, but also everyone covered by the plan. Unlike premiums, out-of-pocket payments concentrate spending on the few who get sick.