While debate over Medicare expansion proposals has focused on coverage, a key feature of several proposals is the reduction or elimination of cost sharing. The Medicare-for-All proposal by Senator Sanders, for example, sought to eliminate cost sharing for almost all health care services, with the exception of a $200 out-of-pocket maximum for prescription drugs.

A similar bill by Representative Jayapal proposed to eliminate cost sharing altogether.

Eliminating cost sharing has inherent appeal given the growth in deductibles and copays in recent decades that has made medical care increasingly unaffordable for patients and families. Beyond discouraging patients from seeking care, cost sharing is also linked to adverse health outcomes including increased mortality.

On the other hand, cost sharing remains a tool for constraining overuse—a phenomenon linked to “moral hazard” that reflects care demanded beyond the appropriate or optimal level. Given increasing evidence around low-value care (which often involves expensive services in the “gray areas” of medicine where guidelines are more sparse), some degree of cost sharing to discourage wasteful utilization indeed makes sense.

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