Over the years, cost-sharing has steadily increased in private insurance. In particular, health plans with high deductibles have been increasingly popular among insurers and employers who sponsor health plans. While high deductibles can help lower premiums, in part by reducing the use of health care services, they can also encourage consumers to delay or forgo necessary care. This can lead to worse health outcomes and ultimately greater out-of-pocket costs for consumers.
A new research brief from Georgetown researchers looks at what states have done to lower cost-sharing barriers for their residents in the individual and/or small group market. The brief, which was supported by the Robert Wood Johnson Foundation’s Policies for Action program (P4A), was done in partnership with the Urban Institute.
The researchers found that six states—California, Connecticut, Massachusetts, New York, Oregon and Vermont—and the District of Columbia (D.C.) have policies aimed at lowering cost-sharing for specified health care services and drugs through state-prescribed standardized plan designs. Except for New York, which only covers prescription drugs pre-deductible, these standardized benefit plans cover the following pre-deductible services with low to moderate copays: doctor’s visits for non-preventive primary care, specialty care, mental health and substance use disorder; urgent care; and generic prescription drugs in the most popular level of coverage.
The researchers also conducted in-depth interviews with key stakeholders such as marketplace officials, state regulators, insurance company representatives, and consumer advocates in four of these states (California, Connecticut, D.C. and Massachusetts), and observed the following:
- State officials view standardized plan designs as a mechanism to improve the value and marketability of coverage available to their consumers;
- The development of these standardized plan designs was an open process with stakeholder input; stakeholders highlighted the importance of policy transparency and public input to generate acceptance;
- Developing appropriate benefit designs and making services available pre-deductible within the federal specified levels of coverage is challenging, particularly at the lowest level of coverage (the “Bronze” level), which requires the average consumer to contribute 40 percent cost-sharing;
- None of the study states had yet obtained or reviewed data to help them assess the effectiveness of these policies, particularly with regard to consumers’ access to services, consumer satisfaction, and enrollee retention.
Critics of the Affordable Care Act (ACA) point to high deductibles and cost-sharing as one reason to repeal the law. But current federal legislation to replace the ACA is likely to result in more consumers purchasing high-deductible health plans. State and federal policymakers may wish to consider requiring coverage of certain services pre-deductible or establishing cost-sharing limits for specific, high-value services similar to the states identified in the researchers’ report. These states used standardized plan design as a way to minimize financial barriers to care. However, more research is needed to assess whether such actions ultimately result in improved consumer access to care, reduced financial hardship, or greater enrollee retention.