LESSONS FROM MEDICARE COVERAGE OF COLONOSCOPY AND PSA TEST

Medicare now offers several cancer screening tests for free since the passage of Affordable Care Act (ACA). With a continued legislative interest to further the elimination of beneficiary out-of-pocket cost (e.g. cost-sharing of removing polyps during colonoscopy), current policy initiatives would benefit from a better understanding of the behavioral and financial consequences from earlier Medicare reforms that capped beneficiary’s out-of-pocket payments for cancer screenings.

Our study used sixteen years of Medicare Current Beneficiary Survey, augmented by fee-for-service (FFS) claims to examine the impact of two benefit expansions as a result of the passage of BBA 1997: coverage expansions for colonoscopy (1998 and 2001) and prostate-specific antigen (PSA) tests (2000) for FFS beneficiaries 50 years of age and older. Our study contributed to the field by providing estimates nationally, with a research design that separates the secular trend in utilization from the impact of Medicare coverage. We also contributed by quantifying income transfers resulting from coverage of preventive care. Coverage of new service moves partial individual out-of-pocket costs to the premium, shared by all beneficiaries. Consumption of preventive tests is influenced by a variety of socio-demographic and behavioral factors that translate into access barriers. These additional barriers affect the income transfers associated with coverage of preventive care.

Using a logistic model with interrupted time series design, we estimated the effect of the change in coverage on the probability of receiving a Medicare-paid colonoscopy or PSA test. Findings indicated that the probability of receiving any colonoscopy increased by 4.9 percentage points with the onset of Medicare benefits in 1998. Medicare coverage of screening PSA test was not associated with utilization, and the frequency of PSA testing declined significantly after year 2000 by 3.19 percentage points. Beneficiaries who purchased a supplemental plan, females, and having a usual place of care were more likely to undergo a colonoscopy (2.35 percentage points, 1.13 percentage points, 4.33 percentage points respectively). Strong indicators of lower use of colonoscopy included being non-black racial minorities (-1.27 percentage points), disabled (-3.13 percentage points), poor (-1.21 percentage points), having less than a high school education (-1.54 percentage points), or lacking English proficiency (-2.30 percentage points). In addition, smokers were 2.02-percentage-point less likely to have a colonoscopy. Similar barriers were associated with reduced use of PSA test.

As a result of the coverage expansion, the cost of colonoscopies for users of the service is subsidized by non-users, as well as current and future taxpayers. We quantify the contemporaneous income transfer as the subsidies received minus the change in premiums attributable to the onset of coverage. The expansion would increase the annual Part B premium by $6.45 and taxpayers’ cost by $27.97, on average. Although increased premiums fall on everyone, beneficiaries with additional access barriers received significantly less income transfers. For example, beneficiaries who had a usual place of care received $20 income transfers while those without a usual source of care received $4. With roughly 40 million beneficiaries in Medicare, the total cost to taxpayers would be about $1.12 billion dollars.