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Enrollees may be unaware that preventative services are exempt from the deductible
Consumer-directed health plans (CDHPs), designed to encourage employees to make more cost- and health-conscious decisions, have been shown to reduce the long-term use of outpatient physician visits and prescription drugs, according to new research by the nonprofit Employee Benefit Research Institute (EBRI). Although that may save the consumer and the health plan sponsor money in the short-run, skipping preventative services can lead to more expensive treatments, including high-cost emergency room services, for many conditions. Moreover, many preventive services are covered by CDHPs on a first-dollar basis, but plan enrollees may be unaware of that.
The findings were published in the June 2013 issue of the journal Health Affairs in the article "Consumer-Directed Health Plans Reduce the Long-Term Use of Outpatient Physician Visits and Prescription Drugs." The research was conducted through the EBRI Center for Research on Health Benefits Innovation.
CDHPs are high-deductible health plans linked to either an employee-owned health savings account (HSA) or an employer-owned health reimbursement arrangement (HRA). To learn more about these plans, see the SHRM Online article “Consumer-Driven Decision: Weighing HSAs vs. HRAs.”
Individuals in CDHPs linked to an HSA or HRA must keep track of funds in their accounts. If they use up the funds before meeting the deductible in a given year, they must pay the difference out of pocket. After an enrollee meets the deductible, the plan operates much like a traditional preferred-provider organization (PPO) plan. The theory behind CDHPs is that if participants must meet a high deductible before their insurance benefits are triggered, they will be encouraged to make better health care decisions, such as not going to an emergency department when a visit to a physician would suffice.
The EBRI's research used data from two large employers—one that adopted an HSA plan for all of its employees in 2007 and another with no CDHP—and found that after four years under the HSA plan, enrollees made 0.26 fewer physician office visits per year and had 0.85 fewer prescriptions filled, although they made 0.018 more emergency department visits (all of which are considered statistically significant).
In addition, the likelihood of individuals’ receiving recommended cancer screenings was lower under the HSA plan after one year and, even after recovering somewhat in later years, still lower than baseline at the study’s conclusion.
CDHPs as Single Option
Although usually offered alongside more traditional health plan designs, CDHPs are slowly increasing as employers’ only health insurance offering.
“The availability of CDHPs—both as a choice and on a full-replacement basis—is expected to continue to increase [under health care reform],” noted Paul Fronstin, director of the EBRI’s Health Research and Education Program and co-author of the report. “Recent regulatory decisions related to employer contributions to HRAs and HSAs, combined with the excise tax on high-cost health plansthat takes effect in 2018, make CDHPs more attractive to employers because they may keep costs below the threshold that triggers the tax. This emphasizes the importance of understanding the long-term implications of increased reliance on CDHPs for the use of health care services and spending.”
“Past studies of the impact of these programs on health services’ use have been limited by the potential for selection bias, because enrollees were often given a choice between CDHPs and more traditional options,” explained Christopher Roebuck, president of health economics and policy consulting firm RxEconomics, an EBRI fellow and a report co-author. “This meant that those who chose CDHPs might have fit a particular profile, making it difficult to discern the independent effects of the CDHP.”
Providing Information on Preventive Services
“Given these findings, employers should consider providing periodic, ongoing communications to enrollees regarding services that are exempted from the deductible,” suggested Martín J. Sepúlveda, IBM fellow and vicepresident of health industries research at the IBM Corp, who also co-authored the report.
Under the Patient Protection and Affordable Care Act (PPACA), for example, coverage of preventative health care—including annual physicals, vaccines and cancer screenings under specified guidelines—must be provided on a first-dollar basis, outside of the deductible, including for those enrolled in HSA- or HRA-linked plans.
However, "as long as visits to obtain prescriptions for screening services are subject to the deductible, additional information about screening services might not be sufficient," the report noted. "Plans might also consider monitoring the use of recommended preventive services in order to address nonuse that is not attributable to factors such as changes in eligibility for recommended services or screening recommendations."
Prescription drugs for chronic health conditions are not considered preventative care and, therefore, are only reimbursable in an HSA-linked plan after the deductible is met; HRA-linked plans may cover prescription drugs outside of the deductible.
Stephen Miller, CEBS, is an online editor/manager for SHRM.
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