How might the chronically ill be safeguarded in a world of high-deductible, “consumer-directed” health insurance? During an October 2005 roundtable, cosponsored by Health Affairs and the California HealthCare Foundation, some answers were provided by two dozen leaders from the insurance, clinical, purchaser, consumer, and regulatory communities. Jill Yegian, the CHCF health insurance director, presents the roundtable results in a paper published Oct. 24 on the Health Affairs Web site, part of a seven-paper package on consumer-directed health care.
Roundtable participants agreed that several steps could help protect the chronically ill against adverse effects from high point-of-service cost sharing in consumer-directed plans. These steps included the following:
— Risk adjustment. Plans should consider reducing deductibles and other cost sharing and/or increasing health reimbursement arrangement (HRA) and health savings account (HSA) contributions for the chronically ill, particularly for those with low incomes. Roundtable participants suggested that the Treasury Department alter regulations forbidding employers from linking HSA contributions to health and income.
— Defining “preventive care” broadly. Plans should consider broadly defining “preventive care” — which can be covered before the deductible is satisfied — to include not just services such as mammography and immunizations, but also maintenance drug therapy for chronic diseases. Such therapy can prevent adverse events such as hospitalizations for uncontrolled diabetes, but maintenance drugs are most often excluded from preventive care. Again, participants suggested changes in Treasury regulations that may bar considering maintenance therapy as preventive care in HSA-eligible plans.
— Spreading out cost sharing. Plans should replace all or part of the deductible with coinsurance — under which consumers and plans share costs — and a higher out-of-pocket maximum. This would smooth out cost sharing and “avoid the dilemma of too-strong financial incentives below the deductible and too-weak financial incentives above the deductible.”
— Making cost sharing smarter. Plans should consider focusing out-of-pocket costs on “discretionary care that is subject to patients’ preferences and should reduce out-of-pocket costs for nondiscretionary care.”
In her paper, Yegian says that current evidence is mixed on how the chronically ill will respond to the cost sharing imposed by a high-deductible environment. The Strategic Health Perspectives effort led by Harris Interactive found that “much higher proportions of chronically ill respondents who are enrolled in high-deductible health plans forgo maintenance prescription drug therapy because of cost.” On the other hand, “data collected by McKinsey and Company show that chronically ill respondents in full-replacement consumer-directed plans are more likely than those in other plans to be compliant.” The presence or absence of funded accounts such as HSAs and HRAs may partly explain these divergent results, Yegian suggests; in addition, both efforts are limited by their reliance on self-reported data.
In an effort to provide more definitive data, RAND is undertaking a four-year, $4 million study cosponsored by the CHCF and the Robert Wood Johnson Foundation. The study will examine the effect of high-deductible health plans (with and without spending accounts) on use and quality of care, including differential effects based on health status, income, and other factors. Stay tuned.