Advocates for Evidence-Based Health Policy Speakers
Higher Costs for some with CDHPs
Consumer Directed Health Plans (CDHPs) are high-deductible health plans created to provide enrollees with more options and to encourage value-based decision-making behavior. CDHPs offer lower premiums and higher deductibles compared to traditional health plans and are often used with a health savings account (HSA) or health reimbursement arrangement (HRA). Between 2006 and 2016, CDHP enrollment increased from 4% to 29% and is now a predominant health plan option for many employers. National data indicates that enrollees in CDHPs may save around $300 annually compared to enrollees in traditional plans. However, prior studies found CDHPs resulted in increased financial burden on enrollees with chronic medical conditions and amongst those with lower incomes.
This study investigated the point-of-care or out-of-pocket (OOP) costs incurred by these vulnerable populations. Researchers evaluated a random sample of 689,542 enrollees’ insurance claims from CDHPs and traditional health plans between 2011 to 2013. The data were divided into groups of enrollees that had participated in a CDHP for 1 and 2 years and were compared against a control group of enrollees in a traditional plan for all 3 years of the study. The researchers analyzed groups for excessive financial burden, defined by OOP costs being >3% annual income. After 1 year of CDHP enrollment, the percentage of CDHP enrollees with excessive financial burden rose from 9.7% to 16.0% compared with only a 0.8% increase for those in traditional plans. The burden was highest and rose most significantly for the lower-income population (32.9% to 47.7%) and those with chronic condition (25.3% to 33.9%).
This study did not analyze health plan premiums or employer contributions to HSAs/HRAs, but the findings suggest that CDHPs may lead to increased financial burden on those with lower incomes and chronic medical conditions. Conflicting studies exist on the effect CDHPs have on health outcomes in the poorest and sickest populations. CDHPs may reduce unnecessary medical care, but it is unclear whether they also result in enrollees of certain groups delaying or abstaining from necessary medical care. While the full downstream health effects are not known, efforts to provide better information on health plan choice and out-of-pocket costs may be needed for these vulnerable populations.
Abstract
OBJECTIVE: To evaluate the impact of enrollment in a consumer-directed health plan (CDHP) on out-of-pocket (OOP) spending and on the financial burden associated with healthcare utilization.
STUDY DESIGN: Using commercial claims data from 2011 through 2013, we estimated difference-in-differences models that compared changes in outcomes for individuals who switched to CDHPs (CDHP group) with outcome changes for individuals who remained in traditional plans (traditional plan group).
METHODS: We estimated the impact of CDHP enrollment on OOP spending at the point of care and on having high financial burden, defined as whether an enrollee spent 3% or more of household income on OOP spending. Additionally, we assessed these outcomes for 2 subgroups: those with lower household income and those with chronic conditions.
RESULTS: Within the first year of CDHP enrollment, CDHP enrollees experienced a mean marginal increase in OOP spending of $285 (41% increase; 95% CI, $271-$299; P <.001) relative to traditional plan enrollees. The lower-income and chronic conditions subgroups experienced mean marginal increases in OOP costs of $306 (44% increase; 95% CI, $257-$353; P <.001) and $387 (56% increase; 95% CI, $339-$435; P <.001), respectively. The probability of an enrollee having excessive financial burden increased by 4.3 percentage points (95% CI, 4.0-4.6; P <.001) for the full CDHP sample. These effects were about 3 times larger for the lower-income subgroup (12.3 percentage points; 95% CI, 10.7-13.8; P <.001) and 2 times larger for the chronic conditions subgroup (8.0 percentage points; 95% CI, 6.9-9.1; P <.001).
CONCLUSIONS: CDHP enrollment led to a significant increase in financial burden associated with healthcare utilization, especially for those with lower incomes and those with chronic conditions.
PMID: 29668214
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