On June 26, 2018, we hosted a webinar with top value-based insurance-design expert Dr. A. Mark Fendrick, Director, University of Michigan Center for Value-Based Insurance Design and a Professor of Internal Medicine in the School of Medicine and a Professor of Health Management and Policy in the School of Public Health at the University of Michigan Dr. Fendrick presented his findings of a recent study that examines how current IRS policy on high-deductible health plans (HDHPs) and health savings accounts (HSAs) impacts Americans living with chronic conditions.
Dr. Fendrick focused on the need to change the conversation from “how much” to “how well,” in regard to the move from volume-driven to value-based health care. He described how value-based insurance design sets consumer cost sharing on clinical benefit, not price.
Highlights from the webinar:
IRS rules prohibit coverage of chronic disease care until plan deductible is met. Dr. Fendrick said this is a problem because many can’t afford the care they need for chronic conditions. As high deductible health plan enrollees with chronic conditions are required to pay out-of-pocket for necessary services, they use less care, potentially resulting in poorer health outcomes and higher costs.
A regulatory or legislative change is needed to enable this potential solution of high value health plans, but if done as recommends, it would require an increase of less than 2% in premiums or an increase of less than $200 in general deductible. “The percentage of employers turning to high deductible health plans has more than doubled over the past decade,” said Dr. Fendrick. Additionally, nearly 30% of covered workers are enrolled in plans with high deductibles.
However, a significant number of households don’t have liquid assets to cover their plan deductible. So, “rising copayments worsen disparities and adversely affect health, particularly among economically vulnerable individuals and those with chronic conditions,” said Fendrick.
Under ACA, selected preventative services are provided without cost-sharing. Over 137 million Americans have received expanded coverage of preventive services, while there are over 76 million without cost-sharing. Fendrick explained that, “Americans do not care about health care costs; they care about what it costs them.”