10 things to know about high deductible health plans

The rising popularity of high deductible health plans is shaking the financial cornerstones of the healthcare industry, and everyone's pocketbooks are feeling the impact.

  Conventional wisdom suggests high deductible health plans may help lower overall medical expenses by encouraging patients to make selective, cost-conscious care decisions. As consumers bear an increasing burden of healthcare costs by choosing HDHPs, however, industry professionals and payers are seeing significant financial repercussions across the board. From creeping premiums to critical access policies, below are 10 things for healthcare professionals to know about HDHPs in 2016.  

1. HDHPs popular among consumers as a way to reduce spending up-front. The tiered nature of offerings on the exchanges allows consumers to choose their plans based on cost. As many ACA requirements had not kicked in for the first and second enrollment periods in 2013 and 2014, insurers had latitude in keeping premiums low to attract enrollees. Approximately 37 percent of individuals under age 65 with private health insurance enrolled in an HDHP in 2014, according to the NationalCenter for Health Statistics.

2. Premiums expected to spike.  Premium projections for 2016, however, reveal a significant hike for enrollees, negating much of the original appeal of HDHP plans. Blue Cross Blue Shield seeks premium rate increases across many states: 23 percent in Illinois, 25 percent in North Carolina, 37 percent in Kansas and 54 percent in Minnesota, to name a few. The Geisinger Health Plan, based in Danville, Pa., filed for a 40 percent premium increase and the Scott & White Health Plan in Texas requested a 32 percent rate increase, according to Huffington Post. As healthcare costs creep ever higher, consumers worry high deductibles and higher premiums will make coverage unaffordable. 

3. More employees, employers choose HDHP options. In 2015, more than 24 percent of individuals participating in employer-sponsored coverage chose HDHPs, up from 20 percent in 2014. A study from the National Bureau of Economic Research indicated employers who offered high deductible plans reduced company healthcare costs over three years. HDHP is a viable means for employers to control healthcare costs by shifting expenses from companies onto employees. PwC's Health Research Institute predicted 44 percent of employers are expected to offer HDHP as the only benefit option for employees within the next three years.

4. Unaffordability of health insurance. Among adults aged 19-64 who visited the ACA's exchanges this past fall, 57 percent could not afford a health plan, according to the latest study from the Commonwealth Fund. The report found 43 percent of privately insured adults said their deductible is difficult or impossible to afford.

5. Insured Americans opt out of necessary care, citing expenses. HDHPs may have the undesired effect of adversely impacting enrollee's health in the long-run by encouraging medical non-compliance in the short-run. According to Kaiser Family Foundation and New York Times, 62 percent of insurance carriers facing financial difficulties with medical costs delayed dental care, 43 percent skipped physician-recommended tests or treatment, and 41 percent did not fill a prescription.

6. Critical illness plans. More people with HDHPs are choosing critical illness plans to shore up gaps in high-deductible coverage. Since 1999, critical policy sales skyrocketed from $8 million to $381 million in 2015, according to Minnesota Public Radio. The specialized coverage can help those struggling to pay out-of-pocket costs by paying for services and items that conventional plans do not. Critical illness plans pay a lump sum to policy holders hit with catastrophic ailments, such as cancer or stroke. Among prominent insurance companies embracing critical illness plans is Twin Cities-based UnitedHealth Group, which reported strong growth in the critical access market since 2011.

7. Alternative healthcare options. A growing subset of consumers are refusing commercial plans altogether, turning to alternative healthcare providers and cost-sharing models, such as faith-based ministries. The ministry care groups — which do not operate within insurance exchanges and aren't regulated by states — provide a care cost-sharing arrangement among people who hold similar beliefs. Ministry coverage membership has more than doubled since before the ACA was enacted in 2010, climbing to 500,000 members in 2015.

8. Increased deductibles pose reimbursement challenges for providers and billing vendors. Patients who receive services may be unable or unwilling to pay their high deductibles, driving bad debt and charity care at health systems nationwide as reimbursement rates drop. Out-of-pocket costs for insured patients accounted for a growing percentage of providers’ total A/R in 2015, increasing by 13 percent from 2014 according to a Crowe Horwath report.

9. Changing provider billing practice. "The high-deductible doesn't necessarily change the total out-of-pocket amount, but it changes when [patients] owe it and when [providers] should try to collect it," said PayorLogic's director of the division of emergency medicine Mark Owen. "What [HDHPs have] done is created this huge burden on providers to educate the public and provide timely billing, which is not something we're routinely set up to do. We're having to change the way we do billing."

10. Integrated revenue cycle systems. Financial leaders are re-assessing patient revenue streams in the name of improved proficiency and performance. Providers may increasingly invest in eligibility and price estimation technology, payment collection at the point-of-service, upgraded payment and billing contracts and processors as well as fully integrated revenue management systems across health systems.

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