Policy Statement: High-Deductible Health Plans

American Academy of Pediatrics
PEDIATRICS, April 28, 2014

Abstract

High-deductible health plans (HDHPs) are insurance policies with higher deductibles than conventional plans. The Medicare Prescription Drug Improvement and Modernization Act of 2003 linked many HDHPs with tax-advantaged spending accounts. The 2010 Patient Protection and Affordable Care Act continues to provide for HDHPs in its lower-level plans on the health insurance marketplace and provides for them in employer-offered plans. HDHPs decrease the premium cost of insurance policies for purchasers and shift the risk of further payments to the individual subscriber. HDHPs reduce utilization and total medical costs, at least in the short term. Because HDHPs require out-of-pocket payment in the initial stages of care, primary care and other outpatient services as well as elective procedures are the services most affected, whereas higher-cost services in the health care system, incurred after the deductible is met, are unaffected. HDHPs promote adverse selection because healthier and wealthier patients tend to opt out of conventional plans in favor of HDHPs. Because the ill pay more than the healthy under HDHPs, families with children with special health care needs bear an increased cost burden in this model. HDHPs discourage use of nonpreventive primary care and thus are at odds with most recommendations for improving the organization of health care, which focus on strengthening primary care.

This policy statement provides background information on HDHPs, discusses the implications for families and pediatric care providers, and suggests courses of action.

http://pediatrics.aappublications.org/content/early/2014/04/22/peds.2014-0555.full.pdf

Comment:

By Don McCanne, MD

Although this policy statement from the American Academy of Pediatrics is on High-Deductible Health Plans, its reach is well beyond that. It describes some of the consequences of the way that we pay for health care today, not only for children but for everyone.

The abstract above touches on some of these fundamental flaws, but the full statement should be read in its entirety. The last two pages of the text provide a list of recommendations that greatly increase administrative complexity while falling far short of what needs to be done to correct these injustices in health care financing. Single payer advocates will immediately recognize that the financing system needs to be replaced with a single payer system that provides first dollar coverage.

This important policy statement should be downloaded to share with others as we continue with our efforts to provide health care justice for all.

Policy Statement: High-Deductible Health Plans

American Academy of Pediatrics
PEDIATRICS, April 28, 2014

Abstract

High-deductible health plans (HDHPs) are insurance policies with higher deductibles than conventional plans. The Medicare Prescription Drug Improvement and Modernization Act of 2003 linked many HDHPs with tax-advantaged spending accounts. The 2010 Patient Protection and Affordable Care Act continues to provide for HDHPs in its lower-level plans on the health insurance marketplace and provides for them in employer-offered plans. HDHPs decrease the premium cost of insurance policies for purchasers and shift the risk of further payments to the individual subscriber. HDHPs reduce utilization and total medical costs, at least in the short term. Because HDHPs require out-of-pocket payment in the initial stages of care, primary care and other outpatient services as well as elective procedures are the services most affected, whereas higher-cost services in the health care system, incurred after the deductible is met, are unaffected. HDHPs promote adverse selection because healthier and wealthier patients tend to opt out of conventional plans in favor of HDHPs. Because the ill pay more than the healthy under HDHPs, families with children with special health care needs bear an increased cost burden in this model. HDHPs discourage use of nonpreventive primary care and thus are at odds with most recommendations for improving the organization of health care, which focus on strengthening primary care.

This policy statement provides background information on HDHPs, discusses the implications for families and pediatric care providers, and suggests courses of action.

http://pediatrics.aappublications.org/content/early/2014/04/22/peds.2014…

Although this policy statement from the American Academy of Pediatrics is on High-Deductible Health Plans, its reach is well beyond that. It describes some of the consequences of the way that we pay for health care today, not only for children but for everyone.

The abstract above touches on some of these fundamental flaws, but the full statement should be read in its entirety. The last two pages of the text provide a list of recommendations that greatly increase administrative complexity while falling far short of what needs to be done to correct these injustices in health care financing. Single payer advocates will immediately recognize that the financing system needs to be replaced with a single payer system that provides first dollar coverage.

This important policy statement should be downloaded to share with others as we continue with our efforts to provide health care justice for all.