The Downside of High-Deductible Health Plans

Two recent studies have found important disparities in the use of care among patients enrolled in high-deductible plans.
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What's the tipping point when it comes to making smart choices about whether a visit to the doctor or emergency department is needed? We know that one factor (among many) driving up health care costs is inappropriate use of medical care: getting an MRI for a common headache, or going to the emergency department for a cough or a scrape. If patients had to pay for health care services out of pocket--rather than their insurance companies footing the bulk of the bill--might they think twice about how much health care they're using?

That's one argument for high-deductible health plans--those that have lower monthly premiums but that don't pay for services until a patient has paid a large amount out-of-pocket. The logic is that these plans, with an average annual deductible of around $2,000 for individuals and $4,000 for family coverage (although there is considerable range in these options), force consumers to have "skin in the game" and make smarter choices about health care. But, on the flip side, might people also delay or forego care when they really need it if they know they're on the hook for a huge deductible?

The answer, perhaps not surprisingly, is that it depends. Two recent studies have found important disparities in the use of care among patients enrolled in high-deductible plans.

One study, in the journal Health Affairs, found that people of high socioeconomic status enrolled in high-deductible health plans did cut their use of emergency department visits for lower-severity conditions (those that don't actually require emergency services), by 15-20%. And this group's appropriate use of emergency care for serious conditions did not change.

On the other hand, people of lower socioeconomic status who were enrolled in high-deductible plans reduced their emergency department use for serious health conditions--like flare-ups of asthma or congestive heart disease--by 25-30%. Hospitalizations among patients with lower socioeconomic status also declined in the first year of the study, by 23%, but jumped in the second year, suggesting that delayed care led to even more serious illness requiring hospitalization.

Another study, in the journal Medical Care, found similar disparities according to gender, with men enrolled in high-deductible plans more likely than women with the same health care coverage to put off needed care for serious issues like kidney stones or chest pain, and ultimately to have higher hospitalization rates.

These findings are timely, as high-deductible plans are growing in popularity. The rate of enrollment in high-deductible plans has more than doubled since 2009. More than one-third of workers today have an annual deductible of $1,000 or more, in part because Obamacare requires that many important preventive services--regular check-ups, some cancer screenings--be delivered free of charge. And, as Obamacare is fully implemented and the mandates for individuals to have health care coverage and most businesses to offer coverage to their employees, even more Americans--particularly those who work for small businesses--are expected to opt for high-deductible plans, given that they will be among the least expensive options on the new health insurance exchanges.

So how do we address these disparities and ensure that people are making good choices about purchasing and using high-deductible health plans? It starts with education and information.

First, people need to understand the terms of their health care plans and consider a whole range of factors--not just the cost of premiums--when choosing health insurance. Too often, I hear people ask, "Well, shouldn't I just go for the cheapest plan?" For some people, that will be the right choice, but for others, it will be a real gamble--in terms of both health and finances--to purchase a plan that has lower upfront costs but high deductibles and co-pays when care is actually needed.

Second, it's critically important that patients enrolled in high-deductible plans are educated about appropriate use of health care services. Part of this is talking with their doctors about whether tests or procedures are necessary, or whether less expensive alternatives are available (the Choosing Wisely campaign has some great resources for patients and physicians on this topic). But the bigger concern is those at the opposite end of the spectrum, those who forego needed care for serious problems and put their health and their lives at risk.

Finally, at the policy level, it seems that more could be done to ensure that the most vulnerable patients have access to truly affordable health care coverage. The subsidies that will be available through Obamacare will provide some relief beginning in 2014, but plans might consider restructuring the deductible rate to encourage lower-income enrollees to seek appropriate care for serious conditions.

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