As the destiny of the Affordable Care Act commands the attention of the healthcare arena, two researchers have proposed a new way to design health insurance plans that could win bipartisan support—and has already started to do so.
In an invited commentary in JAMA Internal Medicine, the University of Michigan’s Mark Fendrick, MD, and Harvard University’s Michael Chernew, PhD, laid out the framework for what they call a “high-value health plan” (HVHP). The idea also has appeared in a bipartisan U.S. House bill introduced in the last Congress and has received multi-stakeholder support.
The proposal combines the consumer-driven, market-based concepts of high-deductible health plans (HDHPs) linked to health savings accounts (HSAs), with exemptions that enhance coverage for the clinical services that have been proven to benefit patients the most. Fendrick, director of the Center for Value-Based Insurance Design (V-BID), says, “Current Internal Revenue Service [IRS] regulations permit a ‘safe harbor’ that allows coverage of specified preventive services prior to satisfaction of an HSA-HDHP plan deductible. However, existing IRS regulations designate that clinical services meant to treat ‘an existing illness, injury, or condition’ are excluded from pre-deductible coverage.”
As a result, HSA-HDHP patients with chronic illnesses such as diabetes, depression, or heart disease must pay the entire cost of their tests, appointments, and prescriptions until they meet their plan’s deductible. Many of these services are proven to keep their condition from getting worse, and in some cases have been found to lower total healthcare spending.
“While the elimination of financial barriers to preventive care in existing HSA-HDHPs is commendable, plan deductibles cause concern in that consumers may forgo high-value care,” Fendrick says. “To enable the continued growth of HSA-HDHPs, insurers need flexibility to provide pre-deductible coverage for high-quality services across the spectrum of clinical care.”
Barriers to passage
The proposed HVHP concept would require a change to the federal tax code and give health insurance plans more flexibility in designing HSA- HDHPs.
“Given the priority role of HSAs to the Trump Administration and Republicans in Congress, it is important that regulatory barriers be removed to allow health plans coupled with HSAs the flexibility to best serve the health of enrollees,” Fendrick says. “Our innovative HVHP concept provides broader coverage, while preserving the spirit of consumer engagement, accountability, and transparency in consumer-directed health plans.”
Fastest-growing type of insurance
HSA-HDHPs are the fastest growing type of insurance product. About 40% of privately insured Americans under aged 65 years have HDHPs, including many people who have bought insurance on the healthcare.gov marketplace. Each year, these plans require an individual to pay at least $1,300—and a family the first $2,600—of their health costs before their benefit coverage kicks in, according to Fendrick.
Republican-supported health policy proposals aim to increase the use of HSAs, which give people a tax-free place to put cash aside to pay for their deductibles and other health expenses. According to Fendrick, research suggests that patients in HDHPs with chronic conditions skimp on the services they need to manage their diseases.
“Research has shown that a sample HVHP, with pre-deductible coverage of specific evidence-based chronic disease services, would necessitate a modest increase in premiums compared to less generous HDHPs,” Fendrick says. “However, given the enhanced coverage, the HVHP would be a very popular choice for consumers. It is also important to note that expanding coverage to chronic disease services would reduce uncompensated care that is an increasing problem associated with plans of the type.”