Copayment Design

A copayment is a fixed fee that a health insurer requires a patient to pay for a medical expense. In recent years, patients have been paying higher copayments, which in some cases is discouraging the use of needed care.

Researchers are exploring several different types of approaches to copayment design. Among others, these proposals include:

Dynamic Cost-Sharing Models: One approach would align consumer cost-sharing with the actual clinical value of a treatment via “dynamic” pricing. In other words, “the level of consumer cost-sharing for higher cost medication should be aligned with the clinical value – not solely the price – when lower cost alternatives do not produce the desired patient-centered outcomes.” Instead, rather than punishing a patient who perfectly complies with the treatment steps required by the health plan but cannot safely take/does not respond to first-step therapy and requires higher-level treatment, a dynamic approach would instead lower the consumer cost-sharing obligation for higher-line treatment alternatives “only when the first-line therapy is contraindicated or is deemed ineffective at achieving the desired clinical outcome.”

Such a plan would still emphasize lower-cost therapies for initial use when “clinically appropriate,” but shifting to dynamic cost-sharing “enhances access to effective, clinically appropriate therapies, improves patient outcomes, aligns with quality-driven provider initiatives, and promotes efficient expenditures for the payer.”

Value-Based Insurance Design (VBID): One of the essential premises of VBID is the more clinically beneficial a therapy is for a patient, the lower the patient’s cost share, therefore reducing barriers to access for these services. Conversely, treatments that are not proven to be effective for certain patients may have higher co-payments associated with them.