People with high deductibles avoid healthcare they need, study finds

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Myles Ma, CPFCSenior ReporterMyles Ma, CPFC, is a senior reporter and certified personal finance counselor at Policygenius, where he covers insurance and personal finance. His expertise has been featured in The Washington Post, PBS, CNBC, CBS News, USA Today, HuffPost, Salon, Inc. Magazine, MarketWatch, and elsewhere.

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High-deductible health plans are meant to encourage less wasteful spending on healthcare by shifting more costs to patients.

In that sense, they are working. Patients with high-deductible health insurance plans use fewer medical services, which led to lower costs, according to a newly published academic paper.

However, that includes useful and potentially cost-saving services like preventive checkups and cancer screenings, said Nir Menachemi, chair of the Department of Health Policy and Management at Indiana University and one of the authors of the paper. The paper, published in the October issue of the journal Health Affairs, reviewed 28 previous studies of high-deductible health plans.

Patients avoid preventive care even though most, if not all high-deductible health plans cover preventive services with no out-of-pocket costs.

"I think patients are just confused," Menachemi said. "High-deductible health plans represent a different way of conceptualizing health insurance for patients and I think our study may have identified important issues that patient education needs to focus on."

Insurers and physicians need to help patients with high-deductible health plans realize that while they should be cost-conscious, preventive care won't cost them anything, he said.

What are high-deductible health plans?

High-deductible health plans have lower premiums, but patients pay more out-of-pocket until they meet their deductible. The IRS defines a high-deductible health plan as having a deductible of at least $1,300 for an individual or $2,600 for a family.

In-network out-of-pocket expenses, including deductibles, co-payments and coinsurance, can't exceed an annual limit of $6,550 for an individual or $13,100 for a family. Many high-deductible health plans are paired with Health Savings Accounts (HSAs), which let people pay for medical expenses with pre-tax dollars.

High-deductible health plans have become increasingly popular over the past decade. The proportion of workers enrolled in such plans reached 42.6% in 2016, according to a study funded by the Robert Wood Johnson Foundation.

The plans are part of a wave of changes made by insurers and the federal government meant to curb runaway healthcare costs. While many changes sought to cut costs on the hospital side, like reducing expensive, unnecessary tests, high-deductible health plans are meant to cut costs on the patient side.

But while the study found the plans are reducing costs, there's been little to suggest whether they are improving health outcomes. If patients are avoiding preventive care like regular checkups, that could lead to more serious, costly conditions down the line.

More high-deductible plans on the way

Menachemi hopes further studies look at how high-deductible health plans affect mortality and other outcomes.

"The literature has a lot of gaps," he said.

A lot of healthcare reform plans revolve around high-deductible health plans as a means to cut costs. They are becoming more common.

Randy Vogenberg, a partner with Access Market Intelligence, a healthcare consulting company, told industry publication AIS Health he expects high-deductible health plans to account for half the market in 2018, while traditional plans continue to raise deductibles.

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