Amid the rise of high-deductible health plans and the growing prevalence and burden of chronic diseases, some argue that it may time to rethink the concept and regulation of preventive services.
Any of the 18 million Americans diagnosed with diabetes and enrolled in a high-deductible health plan with a health savings account has to pay for glucose, blood pressure, cholesterol and eye tests, among other necessities, out-of-pocket before hitting their deductible, as dictated by Internal Revenue Service regulations for HSA-eligible plans.
Depending on a person's income, that can be a disincentive to get a test or take a medication in the short-run, but in the long-run potentially lead to avoidable complications and unnecessary spending.
It's also bad policy to outright prohibit HSA-eligible plans from covering so-called secondary preventive services before the deductible or with reduced cost-sharing, argues Mark Fendrick, MD, an internal medicine professor at the University of Michigan and director of its Center for Value-Based Insurance Design.
In a new paper, Fendrick and colleagues at Michigan, Harvard and the University of Minnesota argue that amending the IRS's HSA-eligible plan rules to allow coverage of secondary preventive benefits could go a long way towards improving outcomes, reducing unnecessary spending and also attracting new members to high-deductible plans.
A shallow safe harbor for prevention
As of last year, a decade after Congress created HSAs, some 15 million people were covered under high-deductible health plans (HDHPs) and about half of them had the savings accounts.
The 2003 law that created HSAs includes a safe harbor requiring preventive care to be covered without a deductible or with a deductible lower than the annual limit. But the IRS quickly ran into the complexities at the intersection of chronic disease and prevention when it was drafting rules for HSAs.
Several public commenters asked about first-dollar coverage for "continuous prevention" -- averting a second heart attack or stroke, for instance, or complications from diabetes -- and the IRS offered a bit of flexibility, ruling that preventive care can include medication "to prevent the reoccurrence of a disease from which a person has recovered," like cholesterol and anti-hypertensive medications following a heart attack or stroke.
"However," the agency ruled, the preventive care safe harbor "does not include any service or benefit intended to treat an existing illness, injury, or condition."
That, Fendrick and colleagues write, "encompasses the bulk of secondary preventive services and prohibits health plans from offering these benefits before enrollees meet their deductibles."
If that rule could be amended, Fendrick and the other researchers estimate that the impact of extra spending for insurers would be fairly reasonable, in terms of increasing premiums and actuarial value, and could pay off through avoidable catastrophic spending in the long-run and an expanded HDHP market.
Modest premium impact from higher value
Using commercial claims and encounter data, they modelled the effects of HDHP coverage for a limited array of secondary preventive drugs and services: ACE inhibitors, beta-blockers and statins for patients cardiovascular disease; blood pressure monitors for individuals with hypertension; medications for patients with osteoporosis; inhaled corticosteroids and flow meters for asthmatics; glucose control medications, glucometers, hemoglobin A1c tests and retinopathy screenings for diabetics; cholesterol testing; and selective serotonin reuptake inhibitors for those with major depression.
In the MarketScan database, they found 1.05 million members of HDHPs who would be eligible for the secondary preventive services, which they estimated would account for roughly 6 percent of current HDHP spending.
Expanding those secondary preventive benefits to first dollar coverage would require a 5-6 percent increase in premiums, about half due to the shift of payments from members' HSAs to health plans and about half due to increased utilization.
But even with the increase in premiums, the new design could potentially boost membership. Fendrick and colleagues estimated that of the 160 million Americans covered by large and small group plans, as many as 40 million could be attracted to an HDHP covering secondary preventive benefits, especially if income-based cost-sharing reductions and premium credits are combined.
In the long-run, the extra spending in this type of redesign could help pay for itself if the members stay in a plan for an extended period of time.
"There is now relevantly robust evidence that increased consumption of medications and high-value secondary preventive services will result in some reduction in other medical expenditures such as hospitalizations," Fendrick and colleagues write.
They're suggesting that Congress or the IRS amend HSA-eligible HDHP regulations to include one sentence: "The preventive care safe harbor under section 223(c) (2) (C) may include any service or benefit, including drugs and medications, intended to prevent chronic disease progression or complications."
That, they argue, "would allow but not mandate that HDHPs cover, wholly or in part, secondary preventive services before the deductible" -- letting insurers experiment with new models of incentivizing high-value benefits.
For the most part, Americans are used to paying the same amount, through a co-pay, for most tests, services and drugs, regardless of what the evidence shows. "I would like a HDHP that makes bad stuff high deductible and good stuff low," Fendrick, one of the founders of the value-based insurance movement, said in an interview last year.
"One of our great aims," he said, "is to build a multi-stakeholder coalition to convince the Obama Administration that the IRS restriction on the lack of the ability to put secondary preventive services before the deductible needs to be changed."