According to an issue brief from VBID Health, allowing pre-deductible coverage for services or drugs intended to treat an existing illness, injury or condition could be cost-neutral, or potentially even offer cost savings, over current high-deductible health plans that do not have such flexibility. Previous research demonstrated that high-deductible health plans (HDHPs) as they currently exist can negatively impact access and adherence for individuals with chronic conditions and/or low incomes.
This report, a follow-on to a previous issue brief examining pre-deductible access to medications by VBID Health, built upon that research to examine the net federal budgetary impact allowing Health Savings Account-eligible (HSA-eligible) HDHPs to expand pre-deductible coverage to include chronic disease services (HDHP+ plans).
The authors explored four scenarios: two in which some or all employers providing health care plans offered HDHP+ plans in addition to the currently offered HSA-HDHP plans, and two in which some or all health care plan providers replaced existing HSA-HDHP plans with HDHP+ plans.
The report shows that introducing HDHP+ plans would likely result in net federal savings in three of the four scenarios. The potential savings are largely driven by the reduction in tax expenditures as a result of people moving away from Preferred Provider Organization plans (PPOs) to the HDHP+ (“buy down”), which outweighs the tax revenue loss of migration to the more generous HDHP+ from traditional HDHPs (“buy up”). However, the authors noted that the key takeaway is not the magnitude of savings for any one scenario, but the clustering of the different scenarios around budget neutrality; allowing HSA-HDHPs to expand to cover pre-existing conditions would likely be cost-neutral at minimum — or even result in savings.