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The Impact of High-Deductible Health Plans on the Financial Burden of Commercially Insured Population in The United States

      Objectives

      High deductible health plans (HDHPs) are intended to reduce costs by increasing patient cost sharing and thus making patients more cost-conscious. As a result, HDHPs may have significant impact on the financial burden of receiving medical care. This study aims to estimate the causal effect of HDHPs on the financial burden of receiving medical care among the commercially insured population in the US.

      Methods

      We use longitudinal private health insurance claims data from 2011-2013. We use a difference-in-difference (DID) framework to identify the causal effect of HDHP enrollment on financial burden of medical care. Financial burden measures include oop cost and severe burden indicator (oop-income ratio>3% of household income). The DID method compares changes in financial burden for those who switched to HDHPs from traditional plans (treatment group) to changes in financial burden for those who remained in traditional plans (control) group. We also estimate separate estimates for low income population (household income<$40,000 per year) since they might be disproportionately affected by HDHPs.

      Results

      There were 689,542 enrollees in our sample among of whom 36,387 enrollees switched to a HDHP. HDHP enrollment was associated with $284 (p<0.01) increase in oop and 6 (p<0.01) percentage point (pp) change in experiencing severe financial burden. Estimates from quantile regression suggest that HDHP enrollment was associated with $165 (p<0.01) change in oop at the median and $724 (p<0.01) change at the 90thpercentile. HDHPs had a much larger impact on financial burden for low-income population and those with chronic conditions. In particular, the probability of having severe financial burden increased 14 pp (p<0.01) for low-income population and 13 pp (p<0.01) for those with chronic conditions.

      Conclusions

      HDHP enrollment led to a significant increase in the financial burden of receiving medical care. Low income and those with chronic conditions might be especially vulnerable due to enrollment in HDHPs.