As more people are covered by high-deductible health plans, some insurers and employers are easing the cost to consumers. They are covering certain benefits like doctor visits or generic drugs before people have reached their plan’s deductible. But there’s a hitch: Under Internal Revenue Service rules, high-deductible plans that are set up to link to health savings accounts can only cover preventive services like vaccines and mammograms until patients buy enough services on their own to pay down their deductible.
A bipartisan bill was introduced in Congress in July that would allow high-deductible plans that can link to health savings accounts (HSA) to cover care for chronic conditions like diabetes and heart disease before plan members have met their deductibles.
Health savings accounts were introduced in 2004. Individuals and their employers can deposit money into the accounts tax free, where it grows tax free and can be withdrawn tax free to use for medical expenses. The accounts must be linked to health plans that meet certain federal standards, including minimum deductibles of $1,300 for individuals and $2,600 for families in 2016. The plans are required to cover preventive services without cost sharing, but consumers must pay for all other services until they meet their deductible.
Many high-deductible plans don’t meet those standards. The HSA-plan deductible coverage restrictions can be a sticking point when employers and insurers consider what plans to offer.
This legislation would lift those restrictions to some degree, but its passage is far from assured, experts say.
The legislation has been endorsed by consumer groups and policymakers who are proponents of “value-based insurance design,” which encourages health-plan features that nudge consumers to get clinically effective care by reducing or eliminating out-of-pocket costs for such services.
Twenty-nine percent of workers with employer-sponsored coverage are enrolled in a high-deductible plan with a savings account of some sort, according to the Kaiser Family Foundation’s annual survey of employer-sponsored benefits, up from 17 percent in 2011 (Kaiser Health News is an editorially independent program of the foundation.).
These enrollees also generally pay more out of pocket for care than people in traditional plans. People in high-deductible plans were responsible for 24 percent of their medical costs between 2010 and 2014, on average, compared to 14 percent for people in traditional plans, according to a recent study by the Health Care Cost Institute that examined claims data from three major insurers for 40 million Americans. Annual per capita spending out of pocket was $1,030 on average for those in high-deductible plans compared with $687 for people in traditional plans.
Both employer-sponsored and marketplace plans often cover services before the deductible in plans. Two-thirds of plans on the federal marketplace exclude primary care visits from the deductible, according to Avalere Health. Similarly, the deductible doesn’t apply to a majority of workers in employer-sponsored plans when they visit their primary care doctor.
America’s Health Insurance Plans, a trade group, has endorsed the proposed legislation, because it would give insurers more flexibility to design plans that ensure that consumers get the right treatment at the right time, AHIP spokeswoman Clare Krusing says.
