Copayments and user fees are widely used across European health systems as a way to limit public expenditures and influence utilisation. This column exploits a policy reform in Norway that increased the age threshold for exemption from copayments to examine the distributional effects of cost-sharing. Introducing copayments leads to a clear reduction in outpatient healthcare use, even in a system with universal coverage and relatively low fees. Groups with greater health needs and fewer economic resources are disproportionately affected, both in terms of reduced access and increased out-of-pocket costs. Achieving both financial sustainability and equitable access requires careful attention to how cost-sharing policies are designed.
Across Europe, the promise of universal healthcare is under renewed scrutiny. Even in systems with near-universal coverage, policymakers face growing concerns about equity and access. Ageing populations, workforce shortages, rising costs, and post-pandemic backlogs have intensified debates over how public systems can remain financially sustainable without undermining their core commitment to equal access based on need (OECD 2023, European Commission 2022). Increasingly, attention has turned not only to whether care is formally covered, but to the financial barriers patients face when they seek care.
One policy lever at the centre of these debates is patient cost-sharing. Copayments and user fees are widely used across European health systems as a way to limit public expenditures and influence healthcare utilisation. At the same time, international policy organisations and policy analysts have warned that out-of-pocket payments can weaken financial protection and create barriers to access, particularly for low-income households and people with chronic conditions (WHO 2023, Tenand et al. 2024). As a result, cost-sharing has become a focal point in discussions about unmet medical needs and socioeconomic inequalities in access to care across Europe.
These concerns are not limited to Europe. In the US, policy commentators have highlighted how rising deductibles and copayments expose insured patients to substantial financial risk and discourage the use of care, including care that may be clinically appropriate (Kliff 2015, Scott 2021, Pauly and Frean 2019). Even relatively small copayments have been shown to reduce medication use and outpatient visits, raising questions about whether cost-sharing can be reconciled with equitable access to healthcare (Schilling 2009). Together, these debates underscore a shared policy dilemma: when healthcare systems rely on user fees, who bears the burden, and whose access is most affected?
Despite the prominence of this debate, there is limited empirical evidence on how cost-sharing affects different population groups within universal healthcare systems. Most existing evidence focuses on average effects or comes from fragmented insurance systems. Yet distributional effects are central to policy design in universal systems, where healthcare is largely tax-financed but costs are partially shifted to patients at the point of use.
In recent work, we use Norwegian administrative data to provide new evidence on these issues by examining the distributional effects of cost-sharing in a universal healthcare system (Bensnes et al. 2026). Norway offers a particularly informative setting. All residents are covered by public health insurance, access to primary care is widespread, and copayments are modest by international standards. At the same time, outpatient services are subject to user fees, with exemptions for children and annual caps on total out-of-pocket spending.
The analysis exploits a policy reform that increased the age threshold for exemption from copayments, exposing adolescents to cost-sharing for the first time. This reform created a sharp difference in out-of-pocket prices for otherwise similar individuals just above and below the new age cutoff. Comparing healthcare use around this threshold allows for a clean assessment of how cost-sharing affects utilisation and spending.
A key insight from this research is that the distributional consequences of cost-sharing operate along two distinct dimensions. The first is baseline utilisation: some groups use more healthcare even before facing any costs. The second is price responsiveness: some groups reduce their use of care more when prices increase. Importantly, these two dimensions do not necessarily coincide.
The results show that introducing copayments leads to a clear reduction in outpatient healthcare use, even in a system with universal coverage and relatively low fees. Figure 1 shows this overall effect using event study estimates for primary and specialist care, revealing a clear discontinuity in spending at age 16 when copayments are introduced. This finding is consistent with earlier evidence that healthcare demand responds to prices and that cost-sharing reduces utilisation (Newhouse et al. 1993, Chandra et al. 2010). However, Figure 2 demonstrates that the magnitude of the response varies substantially across population groups: lower-income adolescents and those with chronic health conditions show the largest reductions in healthcare use when exposed to copayments, while other groups exhibit more modest responses.
Figure 1 Outpatient healthcare utilisation in primary care (left) and specialist care (right) by age and care category
Figure 2 Heterogeneity in effect of cost-sharing on outpatient utilisation
Lower-income adolescents and those with chronic health conditions reduce their healthcare use more when exposed to cost-sharing. At the same time, these groups have higher baseline utilisation, meaning they rely more heavily on outpatient care even before fees are introduced. As a result, cost-sharing affects them along two margins: they face higher out-of-pocket spending because they use more care, and they experience larger reductions in utilisation when prices increase.
Other groups, such as females and native-born adolescents, also have higher baseline utilisation but are less responsive to price changes. For these groups, cost-sharing primarily increases out-of-pocket spending without substantially reducing utilisation. This distinction matters for equity. For price-sensitive groups, cost-sharing risks discouraging care that may be medically necessary, while simultaneously imposing a greater financial burden.
These findings imply that cost-sharing can exacerbate existing inequalities in healthcare use and financial risk, even within a universal healthcare system. Groups with greater health needs and fewer economic resources are disproportionately affected, both in terms of reduced access and increased out-of-pocket costs. This pattern mirrors broader concerns raised in European policy discussions about socioeconomic gradients in access to care (van Doorslaer et al. 2006).
At the same time, these results do not imply that cost-sharing is inherently inefficient or unjustified. Policymakers often rely on user fees to influence utilisation and manage public budgets, and the evidence confirms that prices affect behaviour. The challenge lies in designing cost-sharing policies that achieve these goals without undermining equity. Uniform copayments applied across heterogeneous populations may be a blunt instrument when baseline needs and price responsiveness differ systematically.
From a policy perspective, the relevant question is not only whether cost-sharing reduces overall utilisation, but whose utilisation is reduced. Aggregate effects can conceal substantial heterogeneity, with important implications for access and welfare. This is particularly salient in universal systems, where equity considerations are central to the social contract underpinning public healthcare.
As European health systems confront mounting fiscal and demographic pressures, debates over cost-sharing are likely to intensify. Evidence on the distributional consequences of user fees can help inform these debates by clarifying who bears the financial burden and who is most likely to forgo care. Ensuring the financial sustainability of universal healthcare need not come at the expense of equitable access, but achieving both requires careful attention to how cost-sharing policies are designed.
Source : VOXeu
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