High-deductible health plans reduce care, but at a cost

As high-deductible health plans become a more common fixture in the healthcare industry, the debate continues as to whether such benefit designs reduce care costs and usage--and how that influences consumers' health, according to a new issue brief from Health Affairs.

HDHPs include any health plan that has a deductible higher than $1,300 for an individual and $2,600 for a family, the brief says. In the Affordable Care Act marketplace, almost 90 percent of enrollees have a plan that qualifies as an HDHP. HDHPs are also becoming more common in the group insurance market, as Kaiser Family Foundation research in September found that deductibles have increased 67 percent since 2010 in employer-based plan, according to the brief.

Several studies support the notion that HDHPs can spur consumers to use fewer healthcare services. This past October, for instance, a study from the National Bureau of Economic Research found that when a large U.S. company switched its employees to an HDHP, they cut back on healthcare services. However, those consumers were not more likely to price shop, and instead reduced overall care usage, including valuable preventive services. This, in turn, could end up costing health insurers more if they lead to greater medical use in the future.

Indeed, the evidence has been mixed as to the health impact of HDHPs' tendency to reduce care usage, according to the brief. It points out that plans with high cost-sharing might harm people with chronic conditions, mental health disorders and other conditions that require long-term care and medication use. HDHPs also disproportionately affect low-income individuals, causing them to use the emergency department for low-severity care or forgo care entirely, the brief says.

Research from the consumer-advocacy organization Families USA also found that nearly 30 percent of adults with deductibles of $1,500 or more per person went without needed care because they couldn't afford it.

Even with these concerns about HDHPs, though, employers are likely to respond to the looming Cadillac tax on high-cost plans by shifting more costs onto employees through deductibles in order to keep plans below the level of taxation, the brief states. And with estimates that healthcare spending will continue to grow faster than the GDP, "the prevalence of high-deductible plans will likely continue to increase," it says.

To learn more:
- read the issue brief

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