Despite more out-of-pocket costs, high-deductible health plans (HDHPs) are often the best financial choice for consumers looking to pay the least for healthcare over the year, according to a new National Bureau of Economic Research (NBER) analysis.
NBER found high-deductible plans would be the lowest overall cost option in 65% of companies with those plans.
Typical savings for selecting a high-deductible plan are more than $500 per year.
Traditionally, HDHPs have been seen as potentially a wise choice for young, healthier people who are low healthcare users. They benefit from the lower premiums and don't need to pay many out-of-pocket costs. That's different from older people with families, who likely receive more healthcare services. However, NBER’s report suggested HDHPs are often a better financial option — even for high users of healthcare.
NBER studied whether consumers are buying higher coverage with lower deductibles, such as a PPO, when they could save more by going the HDHP route. NBER looked at HDHP and lower deductible plan data from the Kaiser Family Foundation Employer Health Benefits Survey.
The research found that the higher deductible and out-of-pocket costs in an HDHP are often more than offset by lower premiums and employer contributions to an HDHP-connected health savings account (HSA).
Employers and payers have increasingly turned to HDHPs in hopes of containing healthcare costs. The National Center for Health Statistics’ recently reported that 43% of people under 65 in a private health insurance plan have an HDHP.
More people in HDHPs has meant more out-of-pocket costs in healthcare. TransUnion Healthcare reported last week that out-of-pocket healthcare costs increased 11% during 2017.
Though NBER said healthcare costs can cost less over the year in an HDHP, other studies show that Americans don’t have the money to spend on out-of-pocket costs. A J.P. Morgan Chase Institute report found Americans are struggling to pay medical bills. Plus, a HealthFirst Financial survey found more than 40% of respondents were “very concerned” or “concerned" about whether they could pay those bills over the next two years.
One hope with HDHPs is that putting more costs onto patients will result in them taking more interest in their care. They, in turn, will become better healthcare consumers.
However, the consumer education component, including offering cost and quality information, is largely not happening. A recent Bucknell Institute for Policy Policy (BIPP) national poll found healthcare consumers are not asking providers for price information about healthcare or medical procedures. Another recent study published in JAMA Internal Medicine found that only 14% of people with an HDHP compared prices for healthcare services.
Those who want that kind of information are also having trouble finding the cost and quality data, which means members are shouldering more out-of-pocket costs without the critical consumerism piece.