High-Deductible Health Plans can have a negative effect on financial security.
The growth of High-Deductible Health Plans (HDHPs), in which premiums are lower but out-of-pocket healthcare costs can be significantly higher, puts financial security at risk for those who don’t have the resources to mitigate the risk of unexpected health care expenses.
As health insurance markets continue to evolve, employers who offer health insurance are increasingly offering HDHPs. As of 2016, it’s estimated that 84% of employers now offer such plans and 33% offer only this option. Few offer complementary savings tools, such as Health Savings Accounts (HSAs), to help employees pay for out-of-pocket expenses, and more than half of employers offering HSAs do not make contributions to it. Doing so would make a difference: 45% of consumers we surveyed said that they would access healthcare more regularly if their employer contributed to their health savings
HDHPs are attractive because they provide short-term cost savings on premiums to both the employer and employee. However, unless they are well designed, they increase the risk of out-of-pocket health expenses for employees, which can lead to medical debt, delayed medical care, missed work, and loss of productivity in the workplace. Lower-income employees, who do not have access to financial resources such as savings and affordable credit, are particularly at risk.
Commonwealth has spent 18 months talking with consumers and experts about this challenge and is now looking for pilot partners – employers, health savings account administrators, health insurance companies – to test new ways to design a HDHP to be a win-win for both employers and employees.