High-Deductible Health Plan Study: Five Takeaways

Some 13.5 million Americans have a high-deductible health plan. Research reveals the effect of these plans on the way consumers use and pay for health care services.

November 2012

Enrollment in high-deductible health plans, or HDHPs, grew from 4% of all employer-sponsored plans to 17% between 2006 and 2011. This growth is expected to continue as employers look for options to control costs. HDHPs, also known as consumer-directed health plans and typically paired with a personal health savings account (HSA), will likely be offered by the state health insurance exchanges coming in 2014.

However, questions remain about how HDHPs affect patient use of, and spending on, health care. To find out more, RAND researchers conducted the largest-ever study of HDHPs to examine total medical care spending, use of preventive health care treatments, and the number and cost of episodes of care. It was the first study to assess the impact of the deductible size, savings account type, and employer HSA contributions on use and spending.

Key findings, based on enrollees' first year in an HDHP, include:

  • Health care spending was an average of 14% lower than for families in other plans among households enrolled in HDHPs with at least a $1,000 deductible. This spending difference was not evident with moderate deductibles — from $500 to $999.
  • As families reduced medical spending, they cut back on preventive care such as immunizations and cancer screenings — even though that care was not subject to a deductible.
  • HDHP enrollees initiated fewer episodes of care and spent less per episode when faced with high deductibles. They spent less on inpatient and outpatient care and prescription drugs, but not on emergency department care.
  • When employers made contributions to workers' HSAs of over half of the deductible, the reduction in utilization was lower. However, contributions of less than half had no effect on enrollee spending reductions.
  • Families in high-deductible plans paired with HSAs (owned by the enrollee) reduced spending by about 30%, compared to about 13% for families enrolled in HDHPs with HRAs (health reimbursement arrangements, which are neither enrollee-owned nor portable) or in HDHPs with no HSA.
  • HDHP enrollees with lower incomes and chronic illnesses also reduced medical spending, but not more than other enrollees.

The findings show that consumers in these plans become more sensitive to costs. If the care they are cutting back on is truly unnecessary, they benefit from lower costs and less exposure to medical risk. However, if consumers are forgoing needed care, they could be endangering their health and may need more intensive treatment later. The result could be a spike in health care costs down the road.

As stakeholders and policymakers consider the role of HDHPs in state health insurance exchanges, they will need to balance the cost-containment potential of these products with the possibility of negative consequences.

This study was funded by CHCF and the Robert Wood Johnson Foundation. A fact sheet about the study is available under Document Downloads. In a related Health Affairs blog post, CHCF's Maribeth Shannon suggests how consumers can be more savvy shoppers. More information about the study is available through the External Links.