Renewed emphasis on consumer cost sharing in health insurance benefit design

Abstract

Purchasers and health plans are reemphasizing deductibles, coinsurance, and other consumer incentives in response to renewed inflation and the continuing backlash against managed care. This paper explores the partial convergence of cost sharing and benefit design for preferred provider and health maintenance products and highlights experiments that foster price-conscious choice among benefit configurations, provider networks, systems of care, drugs, medical devices, and clinicians. Health insurance is evolving from comprehensive coverage for a restricted set of choices to limited coverage for a broader set of choices. Diverse benefit designs and increased consumer cost sharing challenge conventional policy wisdom but may counteract some of the pernicious features of the health care status quo.