NCPA - National Center for Policy Analysis

Copayments for Home Care

October 14, 2003

House and Senate negotiators working on Medicare legislation say they are seriously considering imposing a copayment for home health care on patients, one of the few Medicare benefits that do not carry such charges.

Congress eliminated the copayment in 1972 in an effort to encourage the use of home care as an alternative to nursing homes and hospitals, which are generally more expensive. As a result:

  • Medicare spending on home care soared in the early 1990s, reaching $17.5 billion in 1997.
  • But it fell to $10 billion in 2002 from as the government adopted a more restrictive method of payment and cracked down on fraud.
  • The Congressional Budget Office predicts that annual spending will triple in the coming decade, to $32.9 billion in 2013.

Copayments might involve $40 to $45 for each 60-day period in which a beneficiary receives home care. That is about 1.5 percent of the average cost of such care.

For each 60 day period, Medicare typically pays $2,700 to $3,000.

Copayments are one way to encourage Medicare beneficiaries to be more prudent in their use of health care services, say supporters.

Source: Robert Pear, "House and Senate Weigh Co-Payment for Care at Home," New York Times, October 14, 2003.

 

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