The Growing Problem of High Deductible Health Plans
According to a recent Health Beat blog entry, special “high deductible health plans” (HDHPs) that are tied to health savings accounts (HSAs) are gaining popularity in the US. The number of Americans enrolled in these health plans doubled in the last 2 years, to 6 million. Even more alarming is the fact that some see these plans as the way to expand health care coverage. As Maggie Mahar’s blog points out, however, this is far from the truth. The average HDHP deductible for a family in 2005 was $4000 – a huge barrier to access to care. People with high deductibles are more likely to delay or skip care due to cost, leading to greater health needs and higher health care costs in the long run. And, just like for other insurance coverage, premiums for HDHPs are rising quickly.
HDHPs are not a solution to expanding coverage to the low or moderate income. According to Mahar, the only beneficiaries of the advent of HDHPs are the wealthy who can use HSAs as tax shelters. And, as HDHPs gain popularity, Mahar worries that they’re becoming a barrier to system-wide health care reform, by creating a rift between the rich (who benefit from the plans often touted as an alternative to reform) and poor (who need real reform):
"As a gift from the government (actually a remarkably generous present from other,less fortunate taxpayers), the HSA can’t be beat. A family that tucks $5,800 into an HSA for 30 years, and earns 7 percent a year on their investments, will wind up with a nest egg worth well over half a million dollars—tax free. You can then leave the HSA to a spouse, again without paying taxes.... HDHP/HSA plans are a sweet deal for the rich. They pay for care only when they need it—a risk that they can afford thanks to their deep pockets—and they have a new tax shelter to boot."
In MA, the Connector Board last year decided to exempt HDHPs from the Minimum Creditable Coverage standards. This is a huge loophole to the guarantee that everyone has adequate insurance coverage and one that can’t be readdressed too soon.
Lisa Kaplan Howe