High-deductible plans: the tsumani is on its way

Jorge Font
Jorge Font

Jorge Font
SVP, benefits industry innovation, Hobart Group Holdings

The healthcare and pharmaceutical sectors are experiencing changes that will forever alter the way we engage in the healthcare process. We've focused most of our attention of late on healthcare reform, including the Supreme Court's decision to allow the Affordable Care Act to remain in effect. But another transformation has gained momentum largely due to its potential to reduce costs: high-deductible health plans (HDHPs).

Surveys by TowersWatson, National Business Group on Health (NBGH), Kaiser Family Foundation, Mercer and other benefit consultants have documented growth approaching more than 20% of the commercially insured population.

HDHPs require an individual to meet a sizeable deductible—$1,902 on average, according to the most recent Kaiser survey—before getting Rx coverage. (Exceptions include plans that sell pre-deductible coverage for select preventive medicines, although often this is offered in less than half of self-insured plans, by many estimates, or often not at all in fully insured products.) The impact on Rx usage and patient consumption patterns could be extensive for those moving from a $25 co-pay to a $1,902 deductible.

A survey released in April by The Benfield Group asked 105 large employers if the Supreme Court decision would impact their choices regarding a consumer-driven health plan (an HDHP by another name).The responses varied only slightly based on the Supreme Court scenarios, with 34% to 38% saying they would offer/adopt these plans regardless of outcome.

The survey also noted that large employers are converting all their plan offerings to HDHPs. Perhaps the most admired corporate human resources operation, General Electric, converted all of its 300,000+ employees and dependents to HDHPs, as have American Express and others. The rest of corporate America is taking note, especially with the so-called Cadillac Tax of 2018 looming. The market has always been moving in this direction, regardless of the ACA.

The tsunami siren sounded well before ACA, but it was drowned out by the buzz in Washington. Now, we should be heeding the siren's loud warning. It's time to prepare and avoid catastrophic damage. The first steps are to understand the issue and its impact on your business, and then prepare client-facing executives on how best to address this issue with various stakeholders to gain more pre-deductible coverage for key therapeutic areas. Is anyone listening?

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