New bill would mean more flexibility for high-deductible health plans

A new bill aims to give health plans more flexibility to help enrollees treat and prevent chronic diseases.

The bill, called the Chronic Disease Management Act of 2018, would amend the IRS tax code so that high-deductible health plans paired with health savings accounts could cover chronic disease prevention and treatment on a pre-deductible basis. 

Diane Black, R-Tenn., and Earl Blumenauer, D-Ore., introduced the bill in the House on Thursday, and John Thune, R-S.D., and Tom Carper, D-Del., did the same in the Senate, according to a release from the University of Michigan Center for Value-Based Insurance Design.

The existing IRS regulations, the center says in an accompanying fact sheet, permit a “safe harbor” that allows for the coverage of preventive services prior to satisfaction of the plan deductible. But that exception doesn’t include clinical services meant to treat an existing illness or condition, which narrows plan options and can stifle consumers’ ability to benefit from the financial advantages of a tax-free health savings account.

The new bill, on the other hand, would allow insurers to develop and implement “clinically nuanced” high-deductible health plans, the center says. The adoption of those type of policies, it adds, could make patients more likely to adhere to treatment plans, allow for lower premiums, enhance patient-centered outcomes and “substantially” reduce healthcare expenditures.

"This enhanced HDHP would provide millions of Americans a plan option that better meets their clinical and financial needs,” A. Mark Fendrick, M.D., the center’s director, said in a statement. 

The idea of value-based insurance design (V-BID) has been gaining traction in recent years due to its potential to lower costs by allowing payers more leeway in how they design health plan benefits. Indeed, a 2016 study found that a VBID model tested in Connecticut was able to boost the use of preventive healthcare services among participants.

It’s also being tested in privatized Medicare. In fact, the Trump administration announced in November that it would expand the existing Medicare Advantage value-based insurance design model to an additional 15 states and broaden the options available for participants.