CDHP out-of-pocket costs are much higher than those for traditional coverage

A new study from the Health Care Cost Institute (HCCI) shows lower total per capita spending on health care for people with consumer-driven health plans (CDHPs). HCCI posits that this is driven in part by the same people using less health care overall than people with traditional non-CDHP commercial health plans. However, for the same period studied, HCCI says that spending out of pocket by CDHP consumers was 1.5 times higher on average than non-CDHP consumers.

The study is entitled Consumer Driven Health Plans: A Cost and Utilization Analysis, and in it, HCCI examines health care use and spending from 2010-2014 for people covered by employer-sponsored insurance (ESI) and under 65 years of age who are enrolled in CDHPs. HCCI states that enrollment in CDHPs has been steadily increasing within its own employee-sponsored insurance population with more than a quarter of that population having CDHPs in 2014, compared to just 15 percent in 2010.

“By using actual payments from HCCI’s commercial claims data, we are able to put numbers on commonly held beliefs to better understand out-of-pocket spending and also the trends in health care use for consumers enrolled in consumer-driven health plans,” said HCCI Executive Director David Newman. “As more employers offer consumer-driven health plans, it is critical to examine how they compare in practice to other types of health plans.”

In a more specific example, HCCI says that people enrolled in consumer-driven health plans paid an annual average $58 more out of pocket on visits to the doctor and $50 more on emergency room visits than their non-CDHP counterparts, while using roughly 8 and 10 percent fewer visits, respectively.

Higher out-of-pocket spending. Fewer total dollars were spent on health care for people with CDHPs, in part because people with CDHPs tended to use fewer health care services, HCCI found. However, people with CDHPs had higher spending out of pocket on deductibles, copays, and coinsurance (excluding premiums). This higher out-of-pocket spending meant people enrolled in CDHPs were responsible for nearly a quarter of their medical costs on average, compared to 14 percent for those enrolled in non-CDHPs.

“As the costs of health care increase, consumer-driven health plans try to balance lower premiums with higher deductibles and higher limits on out-of-pocket spending,” said HCCI Senior Researcher Amanda Frost. “As these types of plans grow in prevalence, it is important to look beyond premium dollars and also consider dollars spent directly on health care services.”

Following are some key finding from the HCCI study:

• Annual total spending on health care for the CDHP population was, on average, $520 less per capita than the non-CDHP population. In 2014, spending totaled $4,481 per CDHP person and $5,140 per non-CDHP person.

• Across the study period, people with CDHPs used around 10 percent fewer health care services than the non-CDHP population, and used even fewer brand prescriptions (20 percent fewer filled days than the non-CDHP population).

• On average, people with CDHPs spent $1,030 per person out of pocket annually on care, compared to $687 for the non-CDHP population.

• Of the 5 age groups studied, the group ages 19-25 was the only one in which CDHP consumers generally used more health services and had slightly higher per capita spending than their non-CHDP counterparts. Additionally, 19-25 year olds covered by a CDHP spent 81 percent more out of pocket than those without a CDHP, the largest spending difference amongst the 5 age groups.

SOURCE: HCCI press release, September 13, 2016.

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