[Congressional Record Volume 143, Number 1 (Tuesday, January 7, 1997)]
[Extensions of Remarks]
[Page E58]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




    ADVERSE EFFECTS OF INCREASING MEDICARE COST-SHARING ON THE POOR

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                        HON. FORTNEY PETE STARK

                             of california

                    in the house of representatives

                        Tuesday, January 7, 1997

  Mr. STARK. Mr. Speaker, I thank the Members for this opportunity to 
address the House on the important issue of Medicare. In our attempt to 
cut Federal spending, we must consider the implications of those policy 
decisions on our Nation's most vulnerable citizens. Much has been said 
of the economical benefits of raising Medicare copayments and 
deductibles, but not enough has been said of the detrimental effects 
those cuts will have on Medicare beneficiaries with low incomes.
  Many of my conclusions on the negative effects of higher cost-sharing 
on the poor are taken from the RAND health insurance experiment. The 
RAND experiment studied the rate of use of health services by assigning 
people to different levels of cost-sharing insurance programs. The 
results of that experiment should encourage us to take a good look at 
the effect our decisions will have on the health of the people we 
represent.
   Mr. Chairman, the RAND experiment clearly showed that with increased 
out-of-pocket costs to the beneficiary; physician visits, hospital 
admissions, prescriptions, dental and vision visits, and mental health 
services use fell. While adverse health effects on the average person 
were shown to be minimal, statistics on the poor were rather 
disturbing. The study found that those with lower income levels 
suffered adverse health effects in many categories under the cost-
sharing plan. The poor will forgo necessary medical attention as out-
of-pocket costs of those services rise. This is a fact that undermines 
the original intent of this program.
  Health areas most affected by a higher rate of cost sharing for the 
poor are hypertension, rate of mortality, dental and vision care. As an 
example of these findings, those with lower incomes who entered the 
experiment with high blood pressure benefited more under the free 
program than under the cost-sharing plan. Low-income groups have 46 
percent more dental visits on the lower cost-sharing plan than on the 
higher. The higher income groups use dental services 26 percent more 
under the lower cost plan. Near and far vision statistics also improved 
in the lower cost plan and predicted mortality rates fell approximately 
10 percent among the poor. In fact, Mr. Chairman, overall serious 
symptoms among the poor declined when the costs of care went down.
  The determination made by this study and others is that those with 
higher needs and lower incomes are not more likely to spend money on 
necessary medical services. Higher cost-sharing in the attempt to 
reduce necessary treatment will also cause a reduction in the use of 
highly effective care. Furthermore, the experiment found significant 
decreases in highly effective care seeking poor beneficiaries.
   Mr. Chairman, raising the cost of Medicare will raise even higher 
the rate of emergency room visits by the poor. Already, those in the 
lower third of the income distribution have emergency department 
expenses 66 percent higher than those of persons in the upper third of 
the income distribution. Raising Medicare costs will only make it more 
difficult for those with lower incomes to see a primary care, office-
based physician and force those patients to seek attention in our 
country's overcrowded emergency rooms.
  All of these facts lead us to the conclusion that if we raise the 
beneficiaries' obligation in the cost of Medicare, those with lower 
income levels will be unable to afford and will not seek out needed 
health services. We have an obligation to fiscally get these 
entitlement programs under control without putting the Nation's most 
needy in harms way. I urge all of my colleagues to consider these 
findings as we work to improve Medicare.

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