09/05/2013

Recent research shows that over a four-year period, high-deductible health plans linked with health savings accounts lowered initial health spending. Researchers analyzed data from claims over the span of five years from a major employer that used high-deductible health plans with HSAs for all employees instead of using the traditional health care offering. The research showed that providing the full-replacement HSA lowered total costs by 25 percent during the first year, which added up to an average savings of more than $525 per person. This was the only type of health plan the employer offered. The results also showed that savings continued during the following three years but at a slower pace.

First year reductions healthcare spending with an high-deductible health plan

Researchers also found that significant reductions in the first year of the HSA plan were experienced in each category of health spending, but there was an exception of inpatient hospital stays. For prescription drugs and laboratory services, the largest decline was noted at more than 35 percent for laboratory services and more than 30 percent for prescription drugs. Only the laboratory and pharmacy spending categories showed significantly lower spending during the entire four-year period that this plan was offered. During the first year of the HSA, spending reductions for the pharmacy category were more than 40 percent for individuals. Pharmacy spending reductions were large and sustained for most of the time periods.Savings-account options that may be used for upfront health care expenses were usually associated with heath coverage featuring high deductibles. These deductibles were over $2,000 for families and over $1,000 for individuals. Such plans are usually labeled as consumer-directed, which is also abbreviated as CDHP. HSAs are included in this category. Employees own the plans, and employers offer them. The government is in charge of controlling the tax-advantaged plans.

Employers have been using CDHPs for more than 10 years. The number of jumbo employers providing CDHPs in 2012 was nearly 60 percent, and the number of larger employers offering them was more than 35 percent. Slightly more than 20 percent of smaller employers offered them during 2012. Out of the surveyed workforce, about 20 percent of workers were enrolled in plans. Numbers continue changing and are likely to continue changing as health insurance evolves in the future. Employers considering making the switch to CDHPs have plenty of issues to consider.