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Yes, Consumer-Driven Health Plans Are a Crock -- but They're Here to Stay

A new RAND study establishes what everyone suspected: People with high-deductible insurance plans -- you know, those so-called "consumer-directed" plans designed to reduce healthcare spending by making patients more "cost conscious" -- tend to skimp on even necessary medical services.

This unsurprising finding has implications for both the new healthcare reform law and the Republicans' wishy-washy alternative. What it says, essentially, is that you get what you pay for. If people can't afford -- or believe they can't afford -- essential healthcare, they won't get it.

In the RAND study of 800,000 households, the researchers found that those with deductibles of at least $1,000 spent 14 percent less on care, on average, than people who had conventional health insurance. The same was true for people with high-deductible plans that were attached to health savings accounts (HSAs); but the propensity of respondents to buy healthcare rose if their employers generously subsidized those HSAs.

Less preventive care
The families in high-deductible plans tended to receive less preventive care, including childhood immunizations, cancer screenings, and routine tests for diabetes. That was somewhat puzzling, because many high-deductible plans exempt preventive care from their deductibles. But it's possible that some of the members of these plans might not have understood their benefits.

This is not the first study that has found that people in consumer-directed health plans -- which combine high deductibles with HSAs -- tend to avoid necessary care. Opponents of these CDHPs have long said that these policies aren't conducive to good health and may harm people who have chronic conditions. But the RAND study is by far the largest study to have examined this topic.

The study's results have negative implications for both sides of the healthcare reform debate. Republicans have long trumpeted the virtues of consumer-directed care, and it was one of the main points in the healthcare program they proposed during last fall's election campaign. So if they get back in power, and try to "repeal and replace" the Affordable Care Act, the RAND study will undoubtedly be thrown in their faces. (Not that that will matter to people who take pride in ignoring the facts.)

The bad news for healthcare reform
On the other hand, the Affordable Care Act also allows state insurance exchanges to offer plans that cover only 60 percent of the actuarial value of the "essential benefits package" now being drawn by the Institute of Medicine. People under 30 and those with incomes of 133 percent-200 percent of the federal poverty level could buy insurance with even skimpier coverage. So the insurance exchanges, too, will be open to charges that they're encouraging people to go without necessary care.

From a strictly clinical point of view, comprehensive insurance is preferable to basic coverage, because people are more likely to see the doctor when they're sick and get the preventive and chronic care they need at the same time.

But another key provision of the ACA requires all health plans to provide preventive coverage for free. So part of making sure that everybody receives appropriate care is to get the word out about that part of the law. Considering how many people think that the reform law has been repealed, a big publicity campaign is clearly in order.

At the end of the day, it's still better to have more people covered, even in high-deductible plans. But it's equally important to make sure that the benefits they receive -- by which I mean the services that are covered -- meet the standard of care in a civilized society.


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