Increased CDHP Use not Likely to Have Adverse Affects

April 25, 2011 (PLANSPONSOR.com) – Researchers have found that in almost all cases, consumer-directed health plan (CDHP) benefit designs affect lower income populations and the chronically ill to the same extent as non-vulnerable populations.

According to the study report, "How Do Consumer-Directed Health Plans Affect Vulnerable Populations?," published in the Forum for Health Economics & Policy, these effects include significant reductions in overall spending that increase with the level of the deductible and greater reductions for high deductible plans when paired with health savings accounts (HSAs) in comparison to health reimbursement arrangements (HRAs). However, the study found that enrollment in CDHPs also leads to reductions in care that is considered beneficial for all groups, and this may have greater health consequences for lower income and chronically ill people than for others.  

Researchers Amelia M. Haviland, RAND Corporation; Neeraj Sood, University of Southern California; Roland McDevitt, Towers Watson; and M. Susan Marquis, RAND Corporation; explained that more low income and chronically ill people are likely to enroll in CDHP plans over the next decade for several reasons: the Patient Protection and Affordable Care Act (PPACA) may accelerate the move to CDHPs among employers because of new requirements on offering coverage and the tax on generous plans; HSA-based plans will also be offered in health insurance exchanges that will be established by 2014 to manage the individual and small group markets, and these lower-premium plans may be attractive to people who have not previously purchased health insurance; and even in public insurance programs, deductibles and HSA-like accounts may arise as states look to greater use of cost-sharing in their Medicaid programs to control cost, especially as health reform is likely to increase cost pressures on state budgets. 

The researchers used health care claims data from 59 large employers to estimate how CDHPs - plans that combine a high deductible with personal accounts – affect health care costs and the use of preventive services by vulnerable populations. The vulnerable populations studied are those that will have increased access to health insurance under health care reform: families with high health care needs and low income families.   

According to the study results, total spending is reduced in high deductible health plans for both vulnerable and non-vulnerable families. High deductible plans paired with HSAs have significantly lower levels of total spending than other high deductible plans for the general population—almost 30% lower spending for families with a high deductible and an HSA compared to about 13% lower spending for similar families in other high deductible plans. There is also a statistically significant reduction in total health care spending for those with a moderate deductible and no health account, but the reductions are small—about 4%. Thus, both the size of the deductible and the type of personal account affect use.  

The findings also suggest that simply eliminating cost-sharing for preventive services may not increase use of these services, at least in the short-run. Although deductibles are waived for preventive care in the CDHP plans studied, high deductibles led to small reductions in receipt of recommended preventive services in low-income and high-risk families as well as non-vulnerable families. Even with the deductible waived, high deductibles may reduce preventive care if the deductible keeps people from seeking care for health problems that would have prompted a referral for some preventive or screening procedure.  

The researchers said that of particular concern are findings that those at high risk in CDHPs received significantly fewer recommended cancer screening procedure, and diabetic patients in high deductible plans received fewer recommended procedures for diabetics. Another potential concern is the finding that those with chronic conditions in CDHPs, most of whom require drug maintenance, reduced spending on prescription drugs by more than other populations in CDHPs.   

The report concluded that this highlights the need for additional research to explore whether more aggressive case management, educational approaches, or other programs would help ensure that patients eliminate unnecessary care and continue with appropriate treatment under CDHPs.  

Rebecca Moore
editors@plansponsor.com