High-deductible health plans

Abstract

High-deductible health plans (HDHPs) are insurance policies with higher deductibles than conventional plans. The Medicare Prescription Drug Improvement and Modernization Act of 2003 linked many HDHPs with tax-advantaged spending accounts. The 2010 Patient Protection and Affordable Care Act continues to provide for HDHPs in its lower-level plans on the health insurance marketplace and provides for them in employer-offered plans. HDHPs decrease the premium cost of insurance policies for purchasers and shift the risk of further payments to the individual subscriber. HDHPs reduce utilization and total medical costs, at least in the short term. Because HDHPs require out-of-pocket payment in the initial stages of care, primary care and other outpatient services as well as elective procedures are the services most affected, whereas higher-cost services in the health care system, incurred after the deductible is met, are unaffected. HDHPs promote adverse selection because healthier and wealthier patients tend to opt out of conventional plans in favor of HDHPs. Because the ill pay more than the healthy under HDHPs, families with children with special health care needs bear an increased cost burden in this model. HDHPs discourage use of nonpreventive primary care and thus are at odds with most recommendations for improving the organization of health care, which focus on strengthening primary care.This policy statement provides background information on HDHPs, discusses the implications for families and pediatric care providers, and suggests courses of action.

Keywords: Patient Protection and Affordable Care Act; health reimbursement arrangement; health savings account; high-deductible health plan; patient-centered medical home.