High deductibles add to consumers' financial stress and dissuade some patients from getting needed medical care. That is not only worrisome, but it could also block attempts to reform U.S. healthcare, health-policy experts warn in the latest New England Journal of Medicine.
High deductibles—an increasingly common feature of private health plans—require patients to spend hundreds, or sometimes thousands of dollars to see doctors, fill prescriptions or get diagnostic tests before their insurance plan will begin to pick up the bill. But experts and advocates have long argued that deductibles can be a nondiscriminatory way to get patients to stop and consider the price and necessity of the medical care they seek.
As private health plans introduce new financial incentives for doctors and hospitals to pay closer attention to disease prevention, primary care and chronic-disease management, the proliferation of high-deductible health plans is creating a new problem, wrote Dr. Elliott Fisher, director of the Dartmouth Institute for Health Policy and Clinical Practice, and Peter Lee, executive director of California's health insurance exchange, in the journal. As systems invest anew in primary care and care coordination, patients have a new incentive to avoid their doctors.
“Substantial or poorly targeted cost sharing could easily undermine these approaches,” Fisher and Lee wrote. “Numerous studies have shown that cost sharing is a blunt instrument, causing patients to cut back on both needed and wasteful care.”
Doctors and hospitals are now increasingly paid by insurers, both public and private, under contracts that include financial incentives if providers promote primary care, better coordinate medical care and reduce spending. Federal officials said last week that an estimated $117 billion in Medicare spending is now under contracts with such incentives under the Affordable Care Act and other initiatives, compared with almost no similar contracts at the start of the decade.
High-deductible plans have flourished in recent years. Last year, 36% of U.S. workers with employer-sponsored health benefits had a deductible of at least $2,000. That's up from 20% in 2010.
Research and surveys suggest households struggle with medical bills under those deductibles, and either delay medical care or take on debt.
Fisher and Lee called for changes to health insurance that would do more to protect patients from high-cost medical bills, as well as possible regulation that would make it easier for consumers to identify plans with high out-of-pocket costs.
California does both, the authors wrote. The state exempts some or all primary-care visits under ACA health plans from deductibles. That allows patients to seek basic care without worrying about whether they can afford it.
“Patients and consumers pay attention to financial incentives,” Fisher said. He added, “They will buy less healthcare if you make them pay for some of it. The challenge is how you design some of those incentives, because they are very blunt.”
California also regulates deductibles, co-insurance and co-payments. The state created a standard for cost sharing in plans sold on each tier—bronze, sliver, gold and platinum—of the state's exchange.
“The aim is to enable consumers to make apples-to-apples comparisons among plans based on cost and network composition (rather than hard-to-interpret differences in deductibles and copayments), and to ensure that consumers do not face undue financial barriers to receiving primary and other high-value care,” the NEJM authors wrote.
The government is now testing that idea. Federal officials last week released standard options for health plans sold on the federal exchanges starting in 2017, but standard plans are not required.
Federal standard plans would exempt some primary-care, outpatient behavioral-health and generic prescriptions from deductibles. Some plans would also exempt specialists and urgent care from deductibles.
Sara Collins, vice president for healthcare coverage and access at the Commonwealth Fund, praised the strategy of cost-sharing standards for health plans. “I think this is so important, so that consumers can be relieved of this pressure when they are shopping for a health plan to try to figure out how much each plan is going to cost them” allowing them to instead focus on the size, quality and convenience of health-plan provider networks, she said.
Consumers can choose from a large number of health plans in ACA markets, the Kaiser Family Foundation found in an analysis of plans sold this year. Consumers also face significant deductibles, depending on the plan. The average bronze plan deductible for medical care and prescriptions was $5,765 for plans sold this year on the federal exchanges. The average silver plan deductible was $3,064.
But the law also includes cost-sharing subsidies for low-income consumers, and limits the total amount patients must pay for each year.
Outside of the exchanges, employers face challenges trying to modify deductibles to exempt primary care or chronic-disease management, said Michael Chernew, a professor of health economics at Harvard University, who is also chairman of the university's benefits committee and a board member on the Massachusetts exchange.
Harvard raised the amount of employees' cost sharing, and introduced a high-deductible health plan in 2015, which drew criticism from faculty and became the subject of a New York Times article.
Chernew said employers must work with health plans on benefit design, and not all insurers have developed plans that exclude some primary-care services from deductibles. Harvard's new high-deductible plan does not exempt primary care or pharmaceuticals, but does have exceptions for preventive care.
Also, under interpretation of IRS regulations, employers that offer high deductibles with health-savings accounts cannot exempt services to manage patients' existing chronic conditions from those deductibles, he said.
Insurers, the U.S. Chamber of Commerce and advocacy groups including Families USA, have launched the Smarter Health Care Coalition in a push to change the IRS rules.
Without such changes, hospitals and doctors will struggle to make the performance gains that policymakers are seeking, said Dr. Mark Fendrick, director of the University of Michigan Center for Value-Based Insurance Design, a Smarter Health Care Coalition member.
“We know healthcare costs are a problem,” he said. “We know that one of the goals is to have a better-informed and engaged consumer.” But across-the-board deductibles get the same result, he said, as patients get less care, needed or not. Patients do get less of what they don't need. “But is has also led to a systemic reduction in things I am begging my patients to do,” Fendrick said.