Co-payments Give Beneficiaries “Skin in the Game,” Drive Medicare Costs

Though allowing Medicare beneficiaries to pay part of the costs of their home healthcare would give them “skin in the game” and alleviate program costs, co-payments could ultimately end up doing just the opposite, according to analysis by the Partnership for Quality Home Healthcare with Avalere Health. 

Having “skin in the game” is defined in the study as the full scope of costs that a beneficiary bears while receiving Medicare-covered services.

As Medicare beneficiaries already bear out-of-pocket expenditures by staying in their homes, co-payments would require them to bear additional costs aside from the large share of income dedicated to basic living expenses. 


Paying for housing and other living expenses while at home reduces Medicare spending, but a re-introduction of a co-payment could cause the program to bear higher costs of institutionalized care, the study notes. 

If a beneficiary were to leave home and instead seek institutionalized care, Medicare would end up footing the bill for treatment, food and housing costs that would otherwise have been assumed by the beneficiary. Receiving care in an institution would in turn lower beneficiaries’ living expenses since the costs are falling mainly to Medicare.

The additional cost resulting from co-payments could even lead to graver scenarios for both Medicare and its beneficiaries as the study suggests co-payments might even be enough to deter home healthcare patients from receiving care in a timely manner.


“A co-payment could lead some low-income beneficiaries to forego needed home health services and end up in an institutional setting as a result, where the cost to Medicare and taxpayers would be higher,” writes the Partnership for Quality Home Healthcare.  

Since beneficiaries prefer to remain in their homes to “age in place,” receiving treatment at home instead of an institutional setting would enable Medicare to deliver services in the what the study notes as the “least costly setting.”

Because imposing an additional cost burden on Medicare beneficiaries could lead to increased costs for the program, the Partnership for Quality Home Healthcare and Avalere Health urge policymakers to consider these cost impacts when assessing home healthcare co-payments. 

Written by Jason Oliva


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