Using V-BID Clinical Nuance to Increase Value in High-Deductible Health Plans
A High-Deductible Health Plan (HDHP) is a health insurance plan with lower premiums and higher deductibles than a traditional health plan. HDHPs paired with a tax-free health savings account (HSA) are among the fastest-growing health plan types in the United States.
As outlined by the U.S. Treasury Department, individuals with a HSA-eligible HDHP are required to pay the full cost of most medications and services until deductibles are met. However, a safe harbor allows some primary preventive services deemed to prevent the onset of disease to be covered prior to satisfaction of deductible.
Currently, services or benefits meant to treat “an existing illness, injury or condition,” are excluded from coverage prior to meeting the deductible in HSA-eligible HDHPs. As chronic disease conditions make up 75 percent of total U.S. health spending, appropriate chronic disease management is an important tool to lower long-term health care costs. As the market for HSA-eligible HDHPs grows, it is important that these plans maintain the flexibility to allow for effective health management for all beneficiaries.
Theoretically, high-deductible plans could adopt a more flexible benefit design offering more protection for certain medical services through a value-based insurance design plan structure. The V-BID Center believes 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 Plan (HVHP) designs without fundamentally altering the original intent and spirit of these plans.
In the summer of 2016, Representatives Diane Black (R-TN) and Earl Blumenauer (D-OR) introduced H.R. 5652 “Access to Better Care Act of 2016.” This bipartisan bill provides high-deductible health plans the flexibility to provide coverage for services that manage chronic disease prior to meeting the plan deductible.
Smarter deductibles might be a natural evolution of health plans, in that consumer cost-sharing would be reduced for the clinical services that are encouraged under many alternative payment models. As value-based reimbursement promotes the delivery of evidence-based, high-quality care, consumer-facing initiatives must encourage—not create barriers—to these high-value services.
Based on recent modeling research, the V-BID Center suggests coupling this new flexibility with an actuarial restriction of no more than a 3% increase on the added spending to maintain the fundamental features of an HSA-eligible HDHP. The actuarial restriction ensures that some plans will not qualify for HSA status, but still allows plans the flexibility needed to design benefits to reflect inherent value across the entire spectrum of services, regardless of the type, clinical condition, or population affected.
Under this model, employers and plan designers can have the flexibility to implement plans that utilize evidence-based, clinically nuanced plan designs that focus on necessary care, not pre-defined service categories while clearly capping both service inclusion and cost of plans. Rising health care spending has created serious fiscal challenges that emphasize the need to better engage consumers in their health care decisions. Appropriate access to necessary care without prohibitive cost-sharing will lead to better health outcomes and more efficient spending of health care dollars.
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