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Redefining the Safety Net

Should California establish a Basic Health Program for certain low-income residents? CHCF's Marian Mulkey captures a recent policy conversation in a Health Affairs blog.

Accountable Care in Action

A new post on the Health Affairs blog details how CalPERS kept costs down in Sacramento through a "virtual" ACO with insurers and providers.

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Health Plans

Friday, March 25, 2011

Individuals Enrolled in High-Deductible Plans Spend Less on Care

Individuals enrolled in high-deductible health plans spent less on health care than families with lower-deductible coverage, and many reduced their use of preventive health services, according to a study from the RAND Corporation, the Boston Globe reports.

For the study, published in the American Journal of Managed Care, researchers looked at claims data for employees of 53 large U.S. companies between 2004 and 2005.

Key Study Findings

Ten million U.S. residents enrolled in high-deductible plans in 2010, a 25% increase over enrollment rates in 2009 and 10 times the number of enrollees in 2005. Consumers enrolled in such plans generally are younger, healthier and more likely to live in areas with higher percentages of college graduates. Researchers adjusted the data to compensate for the differences.

According to the study, families with a deductible of at least $1,000 per person spent about 14% less than families with lower deductibles. In addition, researchers noted that vaccination rates for children declined during the first year their families were covered by high-deductible plans, while rates rose slightly for children in regular plans. The rate of cancer screenings also fell among those in higher-deductible plans.

Comments

Study co-author Amelia Haviland said, "Our findings suggest there is a much greater need for communication with individuals about their benefits," noting that the high deductibles might have served as a deterrent to receiving care.

She added that consumers enrolled in high-deductible plans might not have understood information about their coverage benefits (Lazar, Boston Globe, 3/25).

Reader Comments:
  • 5
  • 05/12/2011
  • John Brown

I ran through all of the options. I found that my best value was a HDHP with a HSA. Lower monthly premiums and deductibles are covered by payments from the HSA using pretax earnings. Total max annual out of pocket costs under $16k.

  • 4
  • 03/25/2011
  • Kamal Muilenburg

Were the results also tracked by the patients' socio-economic demographics. Certainly a key concern about high deductible plans has always been the impact of high out-of-pocket costs on lower income workers and families. One would expect a greater number of people in the lower income bracket to not seek early intervention and preventive services due to out of pocket expenses.

  • 3
  • 03/25/2011
  • James Knight

Although not clearly noted here, many or most of these HDHPs had free preventive care coverage? Historically it takes 3+ years to figure out one's coverage after a significant change. For the under 65 age group where 85% are generally healthy with very few significant health or dental care needs, the learning curve may be much flatter.

  • 2
  • 03/25/2011
  • Robert Forster

To Mir TED: Your question is true until about the last 3 years ago when many small group employers dropped health insurance coverage and their employees has fallen into the individual (and high deductible) market or uninsured. Human nature is that when you have skin in the game you conserve your assets particularly in a recession. Childhood immunizations are the only preventitive services that has shown cost savings over the life cycle. All other although best for the individual actually increase costs over one's life to the program. Also high deductibles have many benefit designs that have meet the perceived needs of the consumer thus eliminating some benefits not needed, like maternity care for men. This will all change with government establishing benefit lines and attempting ultimately to have a comprehensive commodity health plan for all. Rob MD

  • 1
  • 03/25/2011
  • MIR TED

Could it be that the dominant demographics for high deductible customers reflect a lower age and overall better health?



Readers are invited to send feedback to: chl@chcf.org