Objectives. To determine the impact of introducing copayments on medical care use and expenditures for low-income, adult Medicaid beneficiaries.
Data Sources/Study Setting. The Oregon Health Plan (OHP) implemented copayments and other benefit changes for some adult beneficiaries in February 2003.
Study Design. Copayment effects were measured as the “difference-in-difference” in average monthly service use and expenditures among cohorts of OHP Standard (intervention) and Plus (comparison) beneficiaries.
Data Collection/Extraction Methods. There were 10,176 OHP Standard and 10,319 Plus propensity score-matched subjects enrolled during November 2001–October 2002 and May 2003–April 2004 that were selected and assigned to 59 primary care-based service areas with aggregate outcomes calculated in six month intervals yielding 472 observations.
Results. Total expenditures per person remained unchanged (+2.2 percent, p=.47) despite reductions in use (−2.7 percent, p<.001). Use and expenditures per person decreased for pharmacy (−2.2 percent, p<.001; −10.5 percent, p<.001) but increased for inpatient (+27.3 percent, p<.001; +20.1 percent, p=.03) and hospital outpatient services (+13.5 percent, p<.001; +19.7 percent, p<.001). Ambulatory professional (−7.7 percent, p<.001) and emergency department (−7.9 percent, p=.03) use decreased, yet expenditures remained unchanged (−1.5 percent, p=.75; −2.0 percent, p=.68, respectively) as expenditures per service user rose (+6.6 percent, p=.13; +7.9 percent, p=.03, respectively).
Conclusions. In the Oregon Medicaid program applying copayments shifted treatment patterns but did not provide expected savings. Policy makers should use caution in applying copayments to low-income Medicaid beneficiaries.