By NextBestFitModest copays with an income-based annual cap
Keep small charges to discourage low-value use, but cap total out-of-pocket at a share of income and exempt the poor.
Draft decision:RejectedConfidence: medium · not yet reviewed
Conflicts with zero cost sharing; keeps billing at the point of care.
To review: The main alternative if zero cost sharing proves too expensive.
Review ledgerHow this path connects
This path
Modest copays with an income-based annual cap
Concrete changes if chosen
What would actually have to change in law, agencies, payment rules, or systems.
- Set copay schedule by service
- Set annual out-of-pocket cap as a percentage of income using tax data
- Automatic exemptions for low-income people, children, and chronic illness
Effects
Each effect has its own page: the evidence, the case that it is or isn't a real cost, and whom it affects.
What it fixes
- Underinsurance: covered, but can't afford to use it
Small copays discourage low-value use while an income-based annual cap and exemptions protect affordability. Patient cost control allows lower taxes than eliminating cost sharing.
- Low-value care and overtreatment
Small patient charges discourage low-value use.
- Replacing premiums with taxes
Keeping modest copays requires lower taxes than eliminating cost sharing.
What it creates or worsens
- Copays keep billing systems alive and still deter poorer patients
Retaining copays still deters some needed care and requires billing and income verification.
3 paths soften this
Automatic exemptions and annual collection through taxesCopays keep billing systems alive and still deter poorer patientsChosenDrop point-of-care charges entirelyCopays keep billing systems alive and still deter poorer patientsChosenOnly flat, small charges on a few servicesCopays keep billing systems alive and still deter poorer patientsRejected
Who's affected
Who gains
- People with ongoing or specialist care needs
- Underinsurance: covered, but can't afford to use it: High deductibles and coinsurance lead them to avoid care.
- Low-value care and overtreatment: Low-benefit tests and treatments expose them to harm.
- Low- and middle-income households
- Underinsurance: covered, but can't afford to use it: High deductibles and coinsurance lead them to avoid care.
- Health insurers, brokers, and their shareholders
- Low-value care and overtreatment: They pay for tests and treatments with little benefit.
- Taxpayers and public budgets
- Low-value care and overtreatment: They pay for tests and treatments with little benefit.
- High earners
- Replacing premiums with taxes: They pay more under income-based taxes than they did in flat premiums.
- Employers
- Replacing premiums with taxes: Businesses that never offered coverage start paying toward it.
- Health administration and software vendors
- Copays keep billing systems alive and still deter poorer patients: Copays preserve demand for billing services.
Who loses
- Health insurers, brokers, and their shareholders
- Underinsurance: covered, but can't afford to use it: They benefit from lower premiums.
- Employers
- Underinsurance: covered, but can't afford to use it: They benefit from lower premiums.
- Health financing intermediaries and lenders
- Underinsurance: covered, but can't afford to use it: They administer health savings accounts associated with high-deductible plans.
- Hospitals, clinics, and care organizations
- Low-value care and overtreatment: Per-service payments reward additional low-value care.
- Copays keep billing systems alive and still deter poorer patients: Copays require collection, exemptions, and billing work.
- Drug and device makers
- Low-value care and overtreatment: They sell devices and tests used in low-value care.
- Low- and middle-income households
- Replacing premiums with taxes: Income-based taxes replace flat premiums that took a large share of their pay.
- Copays keep billing systems alive and still deter poorer patients: Point-of-care charges deter care, especially for poorer patients.
- People with ongoing or specialist care needs
- Copays keep billing systems alive and still deter poorer patients: Point-of-care charges deter care, especially for poorer patients.
Other ways to soften the losses
- Automatic exemptions using tax data
Where it has been tried
- Germany: In 2018, 7.9% of Germany's statutory health insurance members exceeded the 1% income cap for chronic illness and became exempt from further copays.
- France: Copays largely covered by supplemental insurance; exemptions for chronic disease.