Did copayment changes reduce health service utilization among CHIP enrollees? Evidence from Alabama

To explore whether health care utilization changed among enrollees in Alabama's CHIP program, ALL Kids, following copayment increases at the beginning of fiscal year 2004.

Data on all ALL Kids enrollees over 1999-2009 are obtained from claims files and the state's administrative database.

We use pooled month-level data for all enrollees and conduct covariate-adjusted segmented regression models. Health services considered are inpatient care, emergency department (ED) visits, brand-name prescription drugs, generic prescription drugs, physician office visits and outpatient-services, ambulance services, allergy treatments, and non-preventive dental services. Physician well-visits, preventive dental services, and service use by Native-Americans--which saw no copayment increases--serve as counterfactuals.

There are significant declines in utilization for inpatient care, physician visits, brand-name medications, and ED visits following the copayment increases. By and large, utilization did not decline, or declined only temporarily, for those services and for those enrollees that who not subject to increased copayments.

Copayment increases reduced utilization of many health services among ALL Kids enrollees. Concerns remain regarding the long-term health consequences to low-income children of copayment-induced reductions in health care utilization.