Cost-sharing and prior authorization effects on Medicaid services in California: part I. The beneficiaries' reactions

In January 1972, California initiated a cost-sharing "experiment" as a means of containing rising costs of the Medicaid program. Beneficiaries who had some personal assets were required to pay a token amount for each doctor visit or prescription. This was expected to deter unnecessary services without affecting really needed care. An interview survey was made of beneficiaries continuously in copayment status throughout the 18 months of the experiment. Most beneficiaries had poor knowledge of the program, and tended to confuse copayment with the concurrent constraint of prior authorization for certain classes of service. The beneficiaries reported that the copayment was almost always collected, and most thought it had not affected their health care, but a significant 17 per cent throught it had reduced the care available to them, and these 17 per cent were for the most part in households with high medical need.