By Dylan H. Roby, Gina L. Nicholson, and Gerald F. Kominski
UCLA Center for Health Policy Research
Three million commercially insured Californians were enrolled in high-deductible health plans in 2007. High-deductible health plans (HDHPs) have been gaining momentum in the health insurance market as a way to encourage more rational use of health care services. However, HDHPs come with risks. While the plans offer lower monthly premiums than typical health insurance coverage, they carry much higher deductibles for health care services. For these plans, the average annual deductible for individuals with employer-based insurance is more than $1,800. Studies have shown that significant cost sharing may create disincentives for both necessary and unnecessary care. While individuals with high-deductible plans may be less likely to utilize the emergency room for care, they may also delay necessary treatment or doctor visits.
Another mechanism for improving the affordability of health insurance is the Health Savings Account (HSA), which allows individuals with high-deductible health plans to set aside tax-deductible funds for medical expenses. However, only 23% of commercial HMO and 20% of commercial Kaiser HMO enrollees with HDHPs reported having HSAs as well. Thirty-one percent of commercial PPO enrollees reported having a Health Savings Account in addition to their HDHP.
With the recent passage of health reform, individuals and families will be mandated to have health insurance beginning in 2014. To comply with the mandate and attempt to save money, consumers may purchase plans with lower premiums. However, they could still face high deductibles and cost-sharing requirements, which would harm their ability to access health care.
Full UCLA report (35 pages):
By Don McCanne, MD
This large study from the UCLA Center for Health Policy Research provides yet one more confirmation that the use of high-deductible health plans (HDHPs) continues to expand because of the very high cost of private health insurance, yet these high-deductible plans are causing patients to delay or decline necessary health care.
The supporters of HDHPs claim that health consumers can be protected by health savings accounts. Yet this study confirms that two-thirds to four-fifths of Californians with HDHPs do not have health saving accounts. They remain exposed to the full brunt of the deductible.
These findings are particularly applicable to the insurance exchanges which will be established in 2014. The subsidies to purchase plans within the exchanges will be targeted to the bronze and silver plans. These are plans with lower actuarial values – paying a lower percentage of the health care costs – but they will be the plans that most individuals will have to select because the more generous gold and platinum plans will be unaffordable.
How do the bronze and silver plans maintain a lower actuarial value? Primarily by requiring large deductibles. (Also they may apply greater coinsurance rates – a percentage of the health care costs for which the patient is responsible – and they may strip benefits down to the minimum permitted by government regulations.) Thus high-deductible health plans that reduce access to care will become the norm.
We can do better than that. We can improve Medicare by providing first-dollar coverage – eliminating deductibles and coinsurance – and expanding benefits to include all essential services, and then make it universal so everyone is covered. The near nominal cost of first-dollar coverage is well worth having the assurance that financial barriers to all necessary health care would be removed for everyone.