September 8, 2016
High-deductible group health plans may get much of their power to hold down claim costs by pushing the lowest-wage workers to use cheaper drugs.
At one large U.S. manufacturer that offers high-deductible coverage, the enrollees who had coverage through a low-wage appear to be spending about 70 percent less on prescription drugs.
Use of high-deductible coverage may have cut drug spending about 24 percent for enrollees who had coverage through the highest-wage workers, but only about 10 percent to 15 percent for the other enrollees.
Paul Fronstin, an analyst at the Washington, D.C.-based Employee Benefit Research Institute, and M. Christopher Roebuck, an analyst at Hunt Valley, Maryland-based RxEconomics, have published data on the effects of use of high-deductible coverage on health care spending in a new review of data for workers and dependents who were enrolled in a large U.S. manufacturer’s health plan from 2009 through 2014.
Many of the plan enrollees were eligible for health savings accounts. That meant that the enrollees’ annual deductibles were high enough to qualify them to contribute to health savings accounts, but that their annual out-of-pocket spending maximum amounts were low enough to meet health savings account program requirements.
The enrollees did not necessarily have health savings accounts, and they did not necessarily contribute to any health savings accounts that they happened to have.
The employer’s plan covered about 150,000 to 200,000 people during each year included in the study sample.
In 2013, the enrollees submitted claims for an average of about $4,029 each in health care spending. When broken down by wage category, the totals ranged from $3,338 per year for the lowest-wage workers, who earned less than $50,000 per year from the manufacturer, to $4,148 for the highest-wage workers, who earned $125,000 or more.
Fronstin and Roebuck found that using the health savings account-eligible plan had a dramatic effect on the enrollees in the lowest-wage category.
Typical enrollees in that wage category spent an average of about $619 on prescription drugs in 2013.
Over the period from 2009 through 2014, using an health savings account-eligible plan cut those enrollees’ prescription drug claims by an average of about $435 per year. The spending cut amounted to 70 percent of 2013 drug spending.
Enrollees in the $125,000-and-over category spent an average of $998 on drugs in 2013. Over the period from 2009 through 2014, use of an health savings account-eligible plan reduced their drug spending by an average of $244 per year. That’s equal to about 24 percent of the 2013 spending total.
Health savings accounts had a modest effect on most other types of health care spending.
One exception was spending on emergency room care by the lowest-wage workers, and those workers’ dependents.
Those workers’ families spent an average of only $176 on emergency room care in 2013, but use of an health savings account-eligible plan correlated with $82 in extra annual emergency room spending per person.
That means that, even though the dollar value of the increase in ER spending was low, use of health savings account-eligible coverage correlated with a 50 percent increase in ER spending.
Fronstin and Roebuck say that effect appears to be temporary, but that they see signs in their data that workers with health savings account-eligible coverage need more information about the preventive services they can get with no out-of-pocket cost, before they meet the plan deductible.