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High-Deductible Plans Reduce Costs, But Discourage Preventive Care

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Photo: Bill Shaw/Indiana Public Media

The research shows people use fewer preventative services under high deductible plans because they're worried about getting stuck with the bill.

High-deductible health plans, which have lower premiums but higher out-of-pocket costs, help reduce health care spending, according to a new study from Fairbanks School of Public Health in Indianapolis. But the researchers also found that people on HDHPs are using fewer preventive services such as cancer screenings, perhaps because people are worried about getting stuck with the bill.

HDHPs have become more and more common since they were allowed in 2004. Last month, a survey from the Kaiser Family Foundation found that 28 percent of people who get insurance through their employer were enrolled in a high-deductible plan – an increase of nine percentage points over the last five years.

Professor Nir Menachemi studies health policy at IUPUI and helped author the study. “High deductible health plans seem to get consumers to be more cost conscious, sometimes at the cost of being health conscious,” he said.

The article was published this month in Health Affairs. Menachemi and his team looked at years of study data and found that HDHP’s are associated with fewer services, but, said Menachemi, that’s not always a good thing. For instance, people were less likely to go to their primary care physician or to get cancer screenings. And while unnecessary trips to the ER were reduced, there was also a decrease in ER visits in emergency situations.

In fact, many of these preventive services are often covered under high-deductible plans. “It’s clear that patients are confused about how their high-deductible health plans might be working,” Menachemi said.

“When they suddenly become stewards of these high-deductible health plans…and they’re encouraged by the insurance company and others to be more cost-conscious, they need more education on what they can and cannot use without additional out of pocket costs,” he said.

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