Policymakers Heart Value-Based Benefits…Let’s Add the Concept to HSAs
By Katy Spangler, Co-Director of the Smarter Health Care Coalition
The idea of injecting a stronger value equation into the U.S. health care system is at the core of many discussions policymakers are having about how to fix the system and decrease costs. This is no surprise. The U.S. spent an expected $3.6 trillion on health in 2018 – and our outcomes aren’t as stellar as they could be. Surely the country can do better to achieve more value for the money we are spending.
Enter value-based insurance design and value-based payment reform. These concepts have existed for over a decade, pioneered by large employers, like Pitney Bowes and Marriott, who realized they could be smarter about designing the health benefits for their employees to encourage better health. For example, lowering or removing cost sharing for insulin, test strips, eye exams, and foot exams for enrollees with diabetes makes it easier for those employees to manage their disease. This in turn leads to healthier employees that are more productive, increasing the company’s competitiveness. This isn’t rocket science.
And yet, for the ever-growing number of Americans enrolled in high-deductible health plans (HDHPs) coupled with Health Savings Accounts (HSAs), health plans and employers are prohibited by Internal Revenue Service (IRS) rules from offering these high value services at low or no cost-sharing until after an enrollee has met his or her deductible. A broad coalition of diverse stakeholders, represented by the Smarter Health Care Coalition, agree the outdated IRS rules should be updated to allow plans and employers the option to offer high-value services, like inhalers for people with asthma, before an enrollee has met their deductible. The Administration or Congress could and should act to change these rules.
Admittedly, one of the reasons HDHPs are popular is because they have lower premiums than plans with lower deductibles – and if a plan decided to exclude a gazillion services from the deductible, this would increase the premiums of the plan. Again, not rocket science, and the answer to this problem is that generally plans and employers are incentivized to keep premiums low – but also to keep enrollees healthy. Any new flexibility could be limited such that only high-value drugs or services, like those that manage chronic conditions, could be excluded from the deductible.
This is a small, yet important step policymakers should take to incentivize smarter health care spending.
Katy Spangler is a Co-Director of the Smarter Health Care Coalition. She also serves on the Advisory Board to the University of Michigan Center for Value-Based Insurance Design.