The Use of Higher Co-Payments to Reduce Expenditure on Health Care - Term Paper Example

Download file to see previous pages The use of cost-sharing in health care is often controversial, generating academic debate about its effectiveness as a policy tool and political debate about its feasibility. Economic theory triggers arguments put forward for both sides of the discussion. Neo-classical economists state that the utilization of health services surpasses communally beneficial standards when health care expenses are entirely covered by insurance. Insurance decreases the marginal expenditure of individuals who are utilizing health services because it efficiently lowers the cost of these services to zero. Accordingly, insured individuals will take advantage of as much health care as they would if the health care were free of charge (Thompson and Mossialos n.d., 227). Many studies reveal that when confronted with higher expenses, individuals will procure less care. Preferably, higher co-payments would damp only the use of low-worth care (Chernew and Fendrick n.d., 17). The probable risks of higher cost-sharing are most sensitive for seniors and disabled persons.  Since these people use the majority of health services and medicines, their out-of-pocket expenses for co-payments would be maximum and they are the ones most probably to evade or delay required health care owing to cost problems (Ku 2003). 

When individuals have to disburse fees or co-payments for health care, the quantity can be so high concerning earnings that it results in an “economic catastrophe” for the person or the household. Such high spending health care facilities signify that individuals have to reduce their necessities, for instance, food and clothing, or are incapable of paying for their children's schooling. Every year, around 44 million families, or above 150 million people, all through the world face appalling expenditure, and roughly 25 million families or over 100 million individuals are pressed into poverty by the requirement to disburse for services. ...Download file to see next pagesRead More