Why Didn't I Think of That?

Medicaid beneficiaries tend to hugely overutilize the ER. This is true even in states, such as North Carolina, in which primary care has been made easily accessible specifically to discourage unnecessary ER usage. One reason for continued high ER use is the very low (in some states, $0) co-pay for emergency services.

Simply raising the co-pay would be a political decision. The “Why didn’t I?” proposal would be purely a decision based on self-interest. Since Medicaid members usually do pay modest amounts for drugs, why not offer an option where Medicaid members who agree to a higher ER co-pay, perhaps $25, get half-off on their covered drugs?

There is no coercion and people would be able to switch in or out of this program every 30 (or 90 or whatever) days. At least during a trial period, the program itself would start as an opt-out, for maximum savings.

The economics are compelling: an avoided ER visit saves at least $600 (possibly more if prescriptions are written), while half-off on drugs might cost the state an extra $1-$3 a prescription, as they already cover most of the cost anyway.

Tags: Medicaid, state budgets