Health Insurance

High-deductible plans tied to lower health use, higher out-of-pocket spending

A patient is monitored in an examination room inside the Clinical Decision Unit at Kaiser Permanente's Capitol Hill Medical Center in Washington, D.C.
Brooks Kraft LLC | Corbis | Getty Images

Your less expensive health insurance plan could cost you — even if you use less health care.

People in so-called consumer-driven health plans tend to use fewer medical services than people with other types of coverage, a new study finds.

But they also tend to spend substantially more out of their own pocket at the same time, both in dollar terms and as a share of their overall health costs, according to the study.

The Health Care Cost Institute report looked at costs from 2010 through 2014 associated with consumer-driven health plans, or CDHPs, which tie plans with high deductibles to either a health savings account or to a health-reimbursement arrangement.

High-deductible plans require enrollees to pay more out of pocket for health services than traditional health plans. The deductible in a plan must be met before the plan pays for services. The HSAs and HRAs help to lessen the sting of such costs because they allow either workers or employers to set aside tax-advantaged money to pay for out-of-pocket costs.

As a rule, high-deductible plans also have lower monthly premiums than traditional health plans.

High-deductible plans have become increasingly popular among employers as they seek to keep premiums in check, and discourage unnecessary use of health care.

HCCI's study found that the high-deductible plans appear to be doing just that. The study was based on fee-for-service claims provided by Aetna, Humana and UnitedHealthcare for 40 million people per year who were covered by employer-sponsored insurance.

In every year studied, people who weren't in consumer-directed health plans had total per capita spending on health care that was higher than CDHP enrollees, according to the report.

Average per capita health spending from 2010 to 2014 for non-CDHP coverage was $4,767 annually. That is $520 more than the per capita spending of people with CDHP coverage.

The per capita spending includes both what the plan pays for health services, and what the individual pays out of pocket, personally. It does not include premiums paid for the coverage.

The lower health spending by CDHP-covered people reflects the fact that, as a group, they tend to use less health care than people on other types of plans — with rates of utilization that are 9 to 13 percent lower, depending on the type of care.

Use of brand-name prescriptions by CDHP customers is even lower. Those customers have a utilization rate for brand-name drugs that is 21 percent lower than their non-CDHP counterparts.

Despite being less apt to use health care, the CDHP group pays more out of pocket, on average, when they go to the doctor, get an MRI or pick up a prescription at the local pharmacy.

Per capita out-of-pocket health spending by non-CDHP enrollees was just an average of $687 annually from 2010-2014, according to HCCI's report.

But CDHP enrollees had per capita out-of-pocket spending of $1,030 annually on average. That is $343, or 50 percent, higher than non-CDHP counterparts.

On a percentage basis, people in non-CDHP coverage are responsible for 14 percent of their medical costs, on average.

But people in CDHP coverage end up paying 24 percent of their health-care costs, the report found.