Impact of high deductible health plans on health care utilization

Rising health care costs affect almost every American at one time or another. From the cost to obtain coverage to paying for care, a larger share of costs is shifted toward individuals, including those who obtain coverage through employer-sponsored health plans.

The financial impact from the rising costs is particularly burdensome for low-salary employees who may not have the resources to afford care in high deductible plans. This in turn leads to putting off and, in some cases, completely neglecting their health care.

A new study led by Benjamin D. Ukert, PhD, assistant professor in the Department of Health Policy and Management at the Texas A&M University School of Public Health, has found that lower-salary employees enrolled in an employer-sponsored high deductible health plan (HDHP) have higher rates of acute care utilization and spending but lower rates of primary care spending compared to high-salary employees at the same employer.

Additionally, the results of the study, “Disparities in Health Care Use Among Low-Salary and High-Salary Employees,” which was published recently in the American Journal of Managed Care, suggest that HDHPs discourage routine physician-patient care among low-salary employees.

“There is little evidence displaying how employees at the same employer may have differential health care use patterns,” Ukert said. “The goal of the study was to describe if we can observe difference in health care use within a single employer, where all employees have access to the same resources and insurance network.”

To accomplish this, Ukert and the research team looked at commercial medical claims data and administrative human resource data from a large employer from 2014 to 2018. The researchers linked the administrative data—details on salary and other benefit choices—to each employee in each year with medical claims.

The team found that employees earning less than $75,000 had lower health care utilization and spending than higher-salaried employees. The researchers also found that lower-salary employees utilized and spent less on preventive measures such as outpatient visits and prescription drugs.

However, low-salary employees have significantly higher rates of utilization on preventable and avoidable emergency department visits and inpatient stays.

“What was striking is that the concentration of types of visits was different for low-income individuals compared to higher wage earners,” Ukert said. “One could have expected that they use less care, but foregone care seems to be concentrated among traditional check-up and primary care visits that are relatively cheap.”

The merits of high deductible health plans have been debated because the burden of the costs is placed on the plan holder, which encourages health care shopping and can lead to the reduced utilization of care, particularly among individuals making a low salary.

Those in favor of HDHPs argue that the plans tend to have lower total premiums and lower out of pocket premiums for employees, retaining the traditional value of insurance, protecting employees from large health care expenses with limits on out-of-pocket spending.

On the other side, opponents of HDHPs argue that employees having to face the full cost of their health care can discourage necessary and preventable health care services, especially when the deductible for families can reach more than $4,000. This can lead to delayed diagnosis of health conditions and the potential to miss the window and benefits of early diagnosis or prevention.

“The study provides a first step to understand how socioeconomic characteristics impact health among employed individuals,” Ukert said. “We display disparities where many have not thought to find them.”