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. 

In early June, hearings held by the House Committee on Ways and Means and the Joint Economic Committee both highlighted the benefits of value-based insurance design (VBID) in health savings account–eligible high-deductible health plans (HSA-HDHPs).

The Ways and Means Committee hearing focused on lowering costs and expanding access to healthcare through consumer-directed health plans. VBID was mentioned as a promising reform to HDHPs, particularly in regard to HSA rule flexibility for chronic disease management.

Jody Dietel, chief compliance Officer at Wageworks, Inc, discussed current HSA eligibility rules and called for increased flexibility to cover specified chronic disease services pre-deductible. “One example of an unnecessary hurdle is the existing HSA eligibility rules,” she stated during her testimony. “These (rules) limit employers’ ability to offer value-based insurance designs, which can help pay for specified chronic disease services and improve treatment and condition management.”

Dietel and others, including Congresswoman Diane Black, R-Tennessee, emphasized that this coverage would help cut long-term healthcare costs and generally improve the health of patients. Dietel expressed her support for the Chronic Disease Management Act of 2018, which was jointly sponsored by Black and Congressman Earl Blumenauer, D-Oregon, and would allow for the aforementioned flexibility.

The Joint Economic Committee hearing focused on the potential for health care savings accounts to engage patients more effectively by expanding the “safe harbor.” Originally established to provide predeductible coverage of recommended preventive health services, the expansion of the safe harbor would allow plans more flexibility to cover management of chronic conditions.

Kavita Patel, MD, MSHS, Johns Hopkins primary care physician and nonresident fellow at the Brookings Institution, testified that expanding the IRS “safe harbor” in this way would increase the clinical effectiveness of HSA-HDHPs. She noted that our current system spends money “across the board,” nonspecific to the value of the service, and argued that the US healthcare system should instead focus spending on high-value services. Patel spoke in favor of policies that would allow HSA-HDHPs the flexibility to provide predeductible coverage of high-value services.

The University of Michigan Center for Value-Based Insurance Design (V-BID Center) advocates for flexibility in HSA-HDHPs to allow for effective health management for all beneficiaries, including those with chronic conditions. A targeted strategy exploring coverage for certain high-value, clinically-indicated health services prior to meeting the deductible will produce more effective High-Value Health Plans (HVHP), clinically nuanced alternatives to traditional HDHPs.

Expanding the IRS “safe harbor” would increase the attractiveness and clinical effectiveness of HSA-HDHPs and would better align consumer engagement with provider payment reform initiatives. Adoption of this voluntary, clinically-nuanced HVHP has the potential to mitigate cost-related nonadherence, 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.

For more information about the hearings and VBID in HDHPs, we invite you to view the V-BID Center press release and HDHP Initiative page.