This year’s state budget will be tough for most state services, but one of the biggest losers is Oklahomans who are insured through Medicaid. The FY2015 budget appropriates flat funding to the Oklahoma Health Care Authority (OHCA), which administers Oklahoma’s Medicaid program. However, flat funding from the state translates to an $85-$90 million shortfall, due to rising enrollment and declining federal matching funds.
Without the funding it needs to continue providing the same level of services, OHCA is looking at several options to make up the gap. Steep cuts in provider reimbursement rates of almost 8 percent appear inevitable. The agency is also looking at eliminating some adult dental services and requiring prior authorization for a variety of services, from controlled substance prescriptions to back surgeries.
Another option on the table is to increase copayments for a variety of services for non-pregnant adults, such as home health services, diabetic supplies, and chemotherapy. They are also considering increase pharmacy copayments to $4 on all medications. Currently pharmacy copayments range from $0.65 to $3.50 depending on the price of the drug, while recipients currently have no copayment on preferred generic medications.
OHCA estimates that the new and increased copays would save the state $3.1 million ($8.3 million including savings to the federal government). However, new copays for medications would create savings at significant cost to Oklahoma’s most vulnerable citizens, and they could actually result in greater health care costs later.
Increased copays will harm patients’ health.
A $4 co-pay for a prescription medication may not sound like much, but it is a real barrier to treatment for struggling Medicaid patients. A Kaiser Family Foundation survey concluded that increased cost sharing, such as copayments and premiums, “led to unmet medical need and financial stress, even when amounts were nominal or modest.” As one study participant told a researcher after Oregon instituted a $2 copay for prescription medication, “Being able to afford $2 is a lot of money when you have absolutely nothing.”
Furthermore, increased copays especially hurt the poorest and unhealthiest, who are most in need of help. Someone taking five medications faces a cost burden five times higher than someone taking one medication, creating a heavier burden on those who are sicker. Another group most harmed by this proposal is people with chronic conditions, like asthma, diabetes, or heart disease. Multiple medications at $4 each every month will add up over time.
When patients can’t afford to buy medication, they understandably don’t take them. This leads to increased emergency room utilization, hospitalization, and even death. Summarizing one study, the Center on Budget and Policy Priorities concluded:
The copayments led to a 78 percent increase in the occurrence of adverse events, including death, hospitalization and nursing home admissions, apparently because the reduction in the use of essential medications led to poorer health. The copayments also led to an 88 percent increase in emergency room use.
The study also saw a 9 percent decrease in use of “essential” prescription drugs by those impacted by the copayments, and a 15 percent decrease in use of “less essential” drugs. Similarly, a study in Utah found that Medicaid recipients used 8 percent fewer prescription medications after copays were imposed, and 42 percent of participants polled agreed that the copayments for doctor visits and prescription drugs “seem small, but are actually a huge problem.”
Reviewing a small study from Minnesota, the Center on Budget and Policy Priorities reported after copayments for medications were instituted, half of the Medicaid patients surveyed reported that they had been unable to get their prescription drugs at least once in the last six month due to the increased cost. Doctors prescribe medications because patients need them to maintain or restore good health. Without access to that medication, health outcomes decline.
Copays mean higher costs later.
When patients can’t afford (and thus don’t take) their medication, they’re more likely to experience serious, and more expensive, medical problems later. The Minnesota study reported that 5 percent of patients who failed to get their medications saw subsequent emergency room visits and hospital admissions for related disorders. People with chronic illnesses like high blood pressure, diabetes, or asthma experienced health emergencies such as strokes, asthma attacks, and other complications because they were unable to afford their medication.
Similarly, the Kaiser Family Foundation found that “Coverage losses and affordability problems stemming from increased out-of-pocket costs led to increased pressures on providers and the health care safety-net.” The costs of increased emergency room usage and hospitalizations could dwarf revenues from the $4 copay.
Medicaid copays make it harder for doctors to do their jobs.
Increased prescription drug copayments make managing patient care more complicated for doctors. When treating patients, doctors shouldn’t need to consider whether patients will be able to afford even the least-expensive generic medication, or to judge which medications are most essential for financially-strapped patients who can only afford a few of the drugs they need. Even if unaware of a patient’s exact financial situation, doctors need to be able to trust that the patient will fill all the prescriptions they are given. In short, doctors need to be able to focus on their patients’ health, not their patients’ pocketbooks.
The bottom line
There are clearly no painless options on the the table as a result of the legislature’s failure to meet Medicaid funding needs. Yet the proposed increase in copyaments, which could boost the cost of each prescription by up to $4, will affect the most basic access to care, and will create artificial savings while costing taxpayers more down the line, harming the health of Medicaid patients, and overburden care providers. OHCA should find another way to reduce costs.