Emerging research indicates a way to keep the spread of HDHPs from increasing poorly informed healthcare choices by enrollees.
Aug. 28—Despite recent data indicating a reversal in the trend toward high-deductible health plans (HDHPs), a national federal survey found enrollment surged in 2018 to include nearly half of the privately insured.
Enrollment in HDHPs reached 47 percent of the commercially insured, pre-Medicare population in 2018, representing a 3.3-percentage-point increase from 2017. The jump came in just the first three months of the year, according to a quarterly survey by the Centers for Disease Control and Prevention (CDC).
The CDC survey defined HDHPs as private health plans with annual deductibles of at least $1,350 for individual coverage or $2,700 for family coverage.
The findings appeared contrary to a recent survey of large employers, which offer the largest share of HDHPs. The annual survey by the National Business Group on Health (NBGH) found the share of employers expecting to offer only HDHPs in 2019 was 30 percent among the 170 companies surveyed, compared with 39 percent in 2018—the first decline in seven years. Similarly, a recurring Kaiser Family Foundation survey found enrollment in HDHPs dipped to 28 percent of covered workers in 2017 from 29 percent in 2016.
But the CDC data echoed some other surveys, such as a spring survey of health plans by America’s Health Insurance Plans (AHIP). AHIP found that among employer-sponsored insurance plans, enrollment in HDHPs with a health savings account (HSA) option reached 21.8 million in 2018—an increase of 1.7 million from 2017. An August survey of individuals found HDHP enrollment among private-sector employees increased from 11.4 percent in 2006 to 46.5 percent in 2016.
The CDC survey also included one of the largest groups of health insurance survey respondents—19,510 people.
The HDHP surge was specifically driven by enrollment in consumer-directed health plans (CDHPs), which consist of an HDHP paired with an HSA. At 21.3 percent of respondents, CDHP enrollment was three percentage points higher than in 2017 and almost triple the 7.7 percent share in 2010.
Federal Push
The expanded use of HSAs has come as Congress and the Trump administration have been promoting them to various degrees.
For instance, in an Aug. 23 blog post, Randy Pate, deputy administrator for the Center for Medicare & Medicaid Services (CMS) and director of the Center for Consumer Information and Insurance Oversight, wrote, “Not only are HSA-eligible HDHP premiums generally lower than other plans, but Americans who select an HSA-eligible plan through HealthCare.gov and then open an HSA are able to put additional money aside in their tax-preferred HSA to help with future health care costs.”
He noted that HSA-eligible enrollment encompassed about 9 percent of people with coverage in the 34 states in which the federal government operates the Affordable Care Act (ACA) individual health insurance marketplace.
Pate urged marketplace enrollees to “make an informed decision on whether an HSA is right” for them. But Pate also noted he had been enrolled in a HSA for more than seven years and was “very satisfied by my experience with it.”
Congressional support for HSAs included passage in July by the House of Representatives of a bill, the Increasing Access to Lower Premium Plans and Expanding Health Savings Accounts Act. That legislation would double the HSA contribution limit to $6,650 for individuals and $13,300 for families.
Other provisions would allow HSAs to pay for qualified medical expenses at the start of HDHP coverage if the HSA was opened within 60 days after coverage began for the HDHP.
The House also passed the Restoring Access to Medication and Modernizing Health Savings Accounts Act, which would reverse the ACA ban on using tax-advantaged accounts to purchase over-the-counter medications. Additionally, the bill would allow HDHPs to annually cover up to $250 (individual coverage) or $500 (family coverage) for non-preventive services that may not be covered pre-deductible.
The aim of the latter feature is to allow insurers selling HDHPs to cover various types of care, such as chronic-care treatment, before a plan’s deductible is met.
The legislation drew concerns from some provider advocates for potentially increasing the use of such plans and their attendant problems.
“Consumer-directed health plans may be an appropriate form of coverage for some individuals, including those who have high health care literacy and sufficient means to fund their HSAs or otherwise cover higher upfront costs,” the American Hospital Association (AHA) said in a written statement to Congress about the first bill. “However, the AHA is concerned about the ability of these plans to lower costs and expand access to care for individuals who may not be aware of the limitations of such coverage and who do not have the means to fund their HSAs or otherwise pay for initial care out of pocket.”
For hospitals, HDHPs have increasingly carried damaging financial implications.
In its negative 2018 outlook for not-for-profit hospitals, Moody’s Investor Service noted, “Insurers and employees continue to shift costs to the patient through growth in high-deductible plans, which increases hospitals’ copay collection burdens and will likely increase bad debt.”
Solutions Emerging?
Employers offering HDHPs have concluded that enrollees in HDHP and CDHPs need help understanding their options and financial obligations. Although a growing number of employers and health plans have launched efforts to improve the financial literacy of HDHP enrollees, according to AHIP and NBGH, few enrollees have used those tools.
“We haven’t seen the expected result of people with high deductibles caring about healthcare prices, so far,” said Christopher Whaley, PhD, associate policy researcher at RAND Corporation.
Recent research indicated there may be hope.
A study in the American Journal of Health Economics found that enrollees in employer-sponsored insurance at a “major national retailer” were no more likely to shop for lower-price providers when given access to a price transparency tool, even if they were enrolled in an HDHP. But when reference-pricing incentives were added to the price transparency tool, patients made large shifts to lower-price providers.
“They said ‘We will only pay up to the price of these providers and if you go to a more expensive provider, then that difference is out of your pocket,” said Whaley, one of the study’s authors.
Similarly, Aetna, headquartered in Hartford, Conn., has offered reference pricing since 2013 and found plan sponsors can use it to save as much as 30 percent, noted a recent Leadership article.
“If you have a high deductible, in some sense, everywhere is more expensive so it is harder to price shop in that market,” Whaley said in an interview. “In contrast, what reference pricing does is say ‘These providers are expensive and these providers are cheap. And that is a much stronger signal to go to the cheap providers.”
Among the effects they found, the average price paid for a laboratory test fell by 27 percent and the average price paid per imaging test fell by 13 percent.
“These changes reflect price shopping by patients who used the targeted services, not a response by providers to lower their prices,” the study authors noted.
Rich Daly is a senior writer/editor in HFMA’s Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare
