Full insurance can weaken patients’ incentive to question tests, procedures and hospital costs. Hospitals may also have greater scope to induce demand when insurers pay the bill
A mandatory 10% copayment would leave patients bearing part of every admissible inpatient bill. Consumers should instead be able to choose higher premiums for complete coverage
Patients cannot be expected to assess medical necessity, negotiate procedure costs or compare hospitals. Insurers have the data, expertise and bargaining power to control costs
Insurers can strengthen bargaining power through common hospital networks, benchmark prices and outcome-based contracts
A formal grievance mechanism can also help resolve billing disputes
Optimal insurance balances incentives with protection
Some cost-sharing may be justified for manageable expenses, but catastrophic and uncertain medical costs need stronger financial protection
Consumers should choose between lower premiums with copayment and higher premiums with full coverage
A blanket requirement could make patients bear the cost of systemic inefficiencies