In Part 2 of a webinar series hosted by the National Alliance of Healthcare Buyer Coalitions, experts discussed opportunities for employers to improve value and build smarter franchises in High Deductible Health Plans (HDHP) Health Savings Accounts (HSA).
According to Internal Revenue Service (IRS), as of 2022, an HDHP has a deductible of at least $1,400 for an individual and $2,800 for a family, while the plan’s annual disbursements cannot exceed $7,050 for an individual or $14,000 for a family; limits do not apply to off-network services.
Although HDHPs are becoming more common, are often associated with HSAs, and are popular among employers because they shift costs onto workers, previous research has shown that people with HDHPs are more likely to delay necessary medical care, to encounter financial obstacles and to have their claims rejected by Insurance. Additionally, concerns have been raised about employees’ understanding of HDHPs and whether these plans actually deter individuals from seeking preventive care.
On the other hand, HDHPs could help inspire employees to think about what care is of the highest value for their particular needs and what may be low value care and not necessarily worth their healthcare dollars, explained Kimberly Westrich, MA, vice president of health services research at the National Pharmaceutical Council, who served as the webinar moderator.
For all these reasons, the careful development of HDHPs by employers is crucial; encouraging the uptake of high-value care and generating cost savings by rejecting low-value care was a key topic of discussion.
When it comes to identifying best practices in HDHP HSAs, Laura Rudder Huff, Vice President of Gallagher Research & Insights, presented some consensus statements made by various stakeholders interviewed. In his presentation, Huff defined good practice as “a design that consistently helps enrollees maximize the value of their benefits and navigate treatment options.”
Of the 50 employers (each with at least 5,000 employees) surveyed, 68% said they see a strong or moderate outcome when out-of-pocket expenses create a financial burden for certain segments of employees, particularly those earning salaries. low or medium.
Huff’s research also found “52% [of employers] see strong or moderate results in that out-of-pocket expenses cause employees to delay medical care, 46% received some pushback from their employees who were dissatisfied with the HDHP design, and 36% said they noticed the Personal costs can incentivize employees to reduce medication adherence or drop off medication. »
The researchers were also able to identify 11 good practices, of which 9 were the subject of consensus (66% or more agreed or somewhat agreed with the practice). Some of the best best practices included:
- Provide ongoing training on the plan
- Focus on HSA retirement and non-taxable benefits
- Offer real-time tools providing medical pricing to various locations
However, for the 9 agreed practices, a gap existed between agreement and actual implementation. “So just because employers agree or have a consensus that something is good practice, it can still be difficult for them to implement,” Huff said.
One method of addressing the mismatch between employees’ use of high-value and low-value care is to encourage the adoption by employers of tax-deductible coverage for preventive services.
“In an HSA plan, the deductible is quite strict. It should cover just about everything the health plan covers, except for some preventative services. And that’s been a critique of these plans since their introduction in 2004,” explained Paul Fronstin, PhD, director of the health research and education program at the Employee Benefits Research Institute.
In the summer 2019, the IRS has relaxed some restrictions on what can be excluded from the deductible and covered on a predeductible basis, Fronstin said, noting that the guidelines were very specific and only included 14 particular services. This advisory was an initiative of the Trump administration, highlighting the rare benefits of the insurance design based on the value of bipartisan support.
Additional investigation by Fronstin and Mark Fendrick, MD, professor of internal medicine, health management, and health policy at the University of Michigan, and co-editor of The American Journal of Managed Care®revealed that 76% of respondents in 2020 added predeductible coverage based on the update, but coverage was not evenly distributed across the 14 services.
“Employers were very discriminatory,” Fronstin said. “They picked and chose what they thought they should add coverage for,” and coverage was not free in all areas as some employers introduced coinsurance or co-payments.
Importantly, the survey also showed that the expansion of covered services did not lead to higher premiums. Encouraging greater flexibility in pre-deductible services and covered drugs remains a central goal in advancing value-based insurance design.
“I strongly support Americans who are paying a lot of money out of their own pocket for care they shouldn’t be buying in the first place and care that all of you [employers] shouldn’t cover in the first place,” Fendrick said.
Using the insurer’s coverage of ivermectin for COVID-19 as an antithetical example, Fendrick noted that insurers “don’t really take that aggressive stance in trying to reduce the use of services that they don’t have.” There is clearly no beneficial clinical evidence that you should cover it, at least generously.
Research published in JAMA last month found that for a week in August 2021, insurers heavily subsidized the costs of ivermectin prescriptions for COVID-19, despite no evidence showing the treatment has any benefit for the disease.
“Unnecessary spending by insurers on these prescriptions, estimated at $2.5 million during the week of August 13, 2021, would extrapolate to $129.7 million per year,” while “the actual amount of wastage is still higher because the estimates did not include Medicaid spending,” the researchers wrote.
Discouraging adoption of low-value care through high out-of-pocket spending will result in cost savings that will encourage generous benefits for high-value care.
An additional concern of HDHPs is that the burden of paying the deductible falls on those who are ill and use care, while the premiums will be spread across the population as a whole.
“Many of my patients facing high deductibles and chronic disease needs consider January to be a very worrying time, and we have seen a flattening or even a decline in the percentage enrolled in an HSA-eligible plan” , said Fendrick. As a result, in January, the number of people seeking charity care and the Medicare population both increase.
Those harmed by high deductibles are often financially insecure black and brown populations and suffer from chronic conditions, while evidence supporting the expansion of covered services shows that this decision would lead to improvements in the equity in health, explained Fendrick.
Legislation responding to the need for expansion, the Chronic Disease Management Act, was written. It aims to directly modify the IRS code and give HAS-qualified health plans the flexibility to expand the list of 14 services.
“I hope we can all continue to work to put cost sharing in a way that makes it easier, not harder, for patients to get the care we know will improve their individual health,” Fendrick concluded. “But at the same time, keep putting those barriers in front of those services…it will save you a lot of money on things that you currently cover, that you shouldn’t cover so generously to allow that leeway and prevent patients in need to get the care they truly deserve without having to host a bake sale or do an online Kickstarter campaign.