Prescription Co-Payments will Ration Care for Low Income Consumers

A major factor in the successful treatment of serious and persistent mental illness is the identification of the medication that works best for the individual and his/her understanding and compliance with the medication protocol.  There is a high correlation between successful adjustment in the community and taking the right medication(s) at the right times. People may stop their medication because they experience unpleasant side effects, they cannot afford the cost, or they do not believe they need to continue with medication. 

If Prescription Co-Payments are implemented under Medicaid Fee for Service (FFS) and General Assistance (GA), most low income consumers, who make up the bulk of these programs, will choose to go without medications simply because they won’t be able to        afford them.

The Proposed FY ’05 Budget includes the addition of a $2.00 co-payment capped at $10/month/person for all medications for those enrolled in Medicaid Fee for Service and General Assistance.  Typically the strategy for co-pays and deductibles is  based on the ideas that:

• Co- pays will discourage unnecessary use of service, and

• Everyone should personally share in the cost of their health care; otherwise they don't value what they don't pay for themselves.

But But co-pays also discourage the use of necessary care, most notably for low-income people who are truly sick.  And when consumers forgo their medications, mental illness can become much more severe and lead to increased emergency room use, increased hospitalizations and other serious consequences that exceed savings in drug costs.

National studies bear this out.  Co-payments often decrease access to prescription drugs; especially for the poorest and sickest.

Figure 6 from page 5 of the March 2003 Policy Brief published by the Kaiser Commission on Medicaid and the Uninsured, Health Insurance Premiums and Cost Sharing: Findings from the Research on Low Income Populations article shows the impact of premiums as a percentage of income on participation rates.

Taking the income of several General Assistance(1) and SSI(2) levels, tabulating the percentage of income of $10/person co- pay, and then looking at figure 6, we can get an idea of how the implementation of a prescription co- payment will affect participation.

As you can see from the chart, most mental health consumers, who are among the poorest and sickest, choose to go without their medications when a co- payment is implemented.

• 54% of NJ singles on SSI who are enrolled in Medicaid FFS will choose to go without medicatins rather than pay $10/month for their medication.  This percentage increases to 65% if that same person has a child.
• 67% of NJ's GA Unemployable population will choose to go without medication rather than pay $10/month for their medication.  This percentage increases to 73% if that same person has a child.

In addition, approximately 20, 000 consumers are residents of boarding homes and residential health care facilities and receive a Personal Needs Allotment (PNA) of $80/month.  PNA is used to cover costs for clothes, toiletries, transportation, etc. and it is from this allotment that the co- pay for medications would come.  One could speculate that since only 1/3 of this number are receiving case management, the utilization rates of the others who are on Medicaid FFS would drop significantly.

Conducted in late March of this year, an MHANJ survey of 335 consumers enrolled in Medicaid FFS and GA bears out the national studies: if prescription co- payments are implemented under Medicaid FS and GA, most consumers will choose to go without their medications simply because they cannot afford them.

CONSUMER ADVOCATES OF THE MONTH

Jack Bucher, Executive Director of Collaborative Support Programs of NJ (CSPNJ), for mobilizing many of the over 150 mental health consumers in attendance at the April 7 Department of Human Services' hearing before the Senate Budget and Appropriations Committee.

The Over 300 consumers on General Assistance and Medicaid Fee for Service who filled out our survey so that we could show legislators the harmful effect of co- pays would have on you and others like you.  Your surveys will accompany MHANHJ staff on their visits with budget committee legislators to make them aware of the human side of the issue.  For many of you who are caught in an exhausting struggle with mental illness and poverty, thank you for coming forward to advocate for yourselves and the thousands of consumers who could not.

  Join MHANJ’s Legislative Network!  Contact C. Chin at  973.571.4100 Ex. 37