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Healthcare Stakeholders Call for Flexibility in HSA-HDHPs

Since its inception in 2005, the University of Michigan Center for Value-Based Insurance Design (V-BID) has led efforts to promote the development, implementation, and evaluation of innovative health benefit designs balancing cost and quality. A multidisciplinary team of faculty, including A. Mark Fendrick, MD and Michael E. Chernew, PhD, who first published and named the VBID concept, have guided this approach from early principles to widespread adoption in the private and public sectors. The Center has played a key role in the inclusion of VBID in national healthcare reform legislation, as well as in numerous state initiatives. The basic VBID premise is to align patients' out-of-pocket costs, such as copayments, with the value obtained from health services and providers.
This article was collaboratively written by A. Mark Fendrick, MD, director of the Center for Value-Based Insurance Design (V-BID), and several V-BID Center staff.

As health reform discussions progress, influential stakeholders have urged policy makers to consider increasing the flexibility of health savings account (HSA)–eligible high-deductible health plans (HDHPs). Marilyn Tavenner, the president and CEO of America’s Health Insurance Plans (AHIP), recently said “Policy makers should consider proposals that increase the availability and flexibility of HSAs, allowing plans to exempt certain services from the HDHP deductible (such as prescription drugs to prevent the onset of a chronic condition)…”

Increasing plan flexibility is a key element of the High-Value Health Plan (HVHP), a value-based insurance design initiative designed to improve care quality and affordability in HSA-HDHPs. Guided by the Internal Revenue Service (IRS) safe harbor under section 223(c)(2)(C), HSA-HDHPs may provide select preventive care benefits prior to meeting the plan deductible. However, until the deductible is met, coverage does not include “any service or benefit intended to treat an existing illness, injury, or condition, including drugs or medications.”

Thus, HSA-HDHP enrollees with existing conditions are required to pay out-of-pocket for necessary services, resulting in lower utilization of care, poorer health outcomes, and potentially higher costs.

Adoption of this clinically nuanced HVHP has the potential to mitigate cost-related non-adherence, enhance patient-centered outcomes, allow for premiums lower than most preferred provider organizations and health maintenance organizations, and substantially reduce aggregate healthcare expenditures. The HVHP would provide millions of Americans a plan option that better meets their clinical and financial needs.

To learn more, visit the Clinical Nuance initiative page and the HSA-HDHP page on the V-BID website.

 
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