High-deductible health plans paired with a tax-free health savings account represent a growing percentage of plans across the health insurance landscape.
This article was collaboratively written by A. Mark Fendrick, MD, director of the V-BID Center, and several V-BID Center staff. The following comic was created by V-BID Center staff.
Increasing enrollment in high-deductible health plans (HDHPs) paired with a health savings account (HSA) is changing the health insurance landscape. As of 2014, 17.4 million Americans were enrolled in such plans, which represents a 12% increase from 2013.1 Employers, in particular, are increasingly offering HSA-eligible HDHPs as a way to expand coverage options, lower their healthcare spending, and promote proactive consumer engagement.
As outlined by the Treasury Department, specific preventive services, such as vaccinations and screenings, may be covered prior to satisfaction of the plan deductible. However, services meant to treat “an existing illness, injury, or condition” are excluded from coverage until deductibles are met.
Expanding the Internal Revenue Service (IRS) “safe harbor” to permit coverage of additional evidence-based services prior to meeting the plan’s deductible would increase clinical effectiveness of HSA-HDHPs. This expanded safe harbor may include selected high-value services that are frequently used as health plan quality metrics and included in pay-for-performance programs. Such enhanced coverage would better align consumer engagement with provider payment reform initiatives. Adoption of this voluntary, clinically nuanced HDHP or ‘High Value Health Plan’ 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. This innovative plan design is an attractive alternative for plans facing the excise or “Cadillac” tax imposed by the Affordable Care Act.
To accelerate the adoption of value-based insurance design (VBID) principles in the growing HDHP sector, a multi-stakeholder initiative is underway to expand the IRS preventive care safe harbor under section 223(c)(2)(C), allowing the establishment of a High Value Health Plan, which would cover a broader set of high-value, evidence-based services prior to the satisfaction of the plan deductible. On July 7, 2016, representatives Diane Black (R-TN) and Earl Blumenauer (D-OR) introduced H.R. 5652 “Access to Better Care Act of 2016,” a bill that provides HDHPs the flexibility to provide coverage for services that manage chronic disease prior to meeting the plan deductible.
For more information about HSA-HDHPs, check out the associated infographic.
You can also follow the adventures of High-Value Health Plan woman by clicking on the accompanying comic or visiting the V-BID website.