October 21, 2013


The ACA and High-Deductible Insurance -- Strategies for Sharpening a Blunt Instrument (J. Frank Wharam, M.B., B.Ch., B.A.O., M.P.H., Dennis Ross-Degnan, Sc.D., and Meredith B. Rosenthal, Ph.D., N Engl J Med 2013)

The Affordable Care Act (ACA) will cause a major expansion of high-deductible health insurance, a fact that has received little attention but has substantial implications for patients, health care pro-viders, and employers. High-deductible health plans (HDHPs), often considered "blunt instruments" that indiscriminately reduce utilization of both appropriate and discretionary care, require annual out-of-pocket payments of $1,000 to $10,000 for many services before more comprehensive coverage begins.1 Unfortunately, large gaps remain in our understanding of HDHPs' effects on vulnerable populations, life-saving services, and health outcomes.2,3

In the ACA, Congress chose market-based cost controls over measures that are common internationally, such as global budgets. Mandating coverage while requiring affordable premiums without enacting other cost-control mechanisms almost inevitably gives rise to increased cost sharing as the simplest mechanism for reducing premiums. The ACA is therefore expected to cause a "seismic shift" in HDHP enrollment.[...]

[T]he United States is poorly prepared for an increasingly HDHP-centered system. An accelerated research agenda is needed, but until better evidence emerges, policymakers and employers will have to use the best available information and commonsense strategies. First, they should educate consumers about the best venues for purchasing health insurance. For example, families with incomes below 200% of the poverty level whose employers offer "unaffordable" coverage (as defined by the ACA) will receive more generous benefits if they purchase insurance through a state exchange. Second, vulnerable people should be shifted into low-cost-sharing plans. Larger employers might be best positioned to adopt this approach, by making employees' premium and deductible obligations proportional to their income. They could do so in a cost-neutral manner by cross-subsidizing low-income workers.

Third, employers could facilitate contributions to health savings accounts (HSAs), especially for vulnerable people. HSA contributions are not taxed, roll over from year to year, and are portable across employers. The accumulation of funds over time could reduce barriers to care and protect vulnerable people from major medical expenses. Employers that fund HSAs could prioritize contributions to vulnerable workers in a cost-neutral manner. State exchanges should attempt to offer HSA-eligible plans.

Fourth, state exchanges, employers, and payers could intensify education about HDHPs. Enrollees in these plans generally have a poor understanding of their benefit arrangements; they should be informed about coverage details and about choosing clinically effective, cost-efficient care. Fifth, providers, health insurers, and state exchanges should facilitate shared patient-physician decision making and access to decision tools for patients seeking care. Nurse hotlines or other rapid-communication methods might help prevent adverse health outcomes.

Researchers should evaluate the effectiveness and optimal dissemination of these five strategies. In the long term, a more sophisticated HDHP-centered system will depend on focused research, advanced decision-support tools, and evidence-based policies aiming to ensure equity and the best achievable health outcomes. Studies should examine HDHPs' long-term effects on vulnerable and chronically ill populations such as patients with mental illness, expensive conditions such as cancer, health outcomes such as cardiovascular events and mortality, and health costs.

Posted by at October 21, 2013 9:36 PM

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