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Impact of High-Deductible Health Plans on Health Care Utilization and Costs

Keywords: High-deductible health plans; health insurance; health care utilization; chronically ill

Background. High-deductible health plans (HDHPs) are of high interest to employers, policy makers, and insurers because of potential benefits and risks of this fundamentally new coverage model.

Objective. To investigate the impact of HDHPs on health care utilization and costs in a heterogeneous group of enrollees from a variety of individual and employer-based health plans.

Data. Claims and member data from a major insurer and zip code-level census data.

Study Design. Retrospective difference-in-differences analyses were used to examine the impact of HDHP plans. This analytical approach compared changes in utilization and expenditures over time (2007 versus 2005) across the two comparison groups (HDHP switchers versus matched PPO controls).

Results. In two-part models, HDHP enrollment was associated with reduced emergency room use, increases in prescription medication use, and no change in overall outpatient expenditures. The impact of HDHPs on utilization differed by subgroup. Chronically ill enrollees and those who clearly had a choice of plans were more likely to increase utilization in specific categories after switching to an HDHP plan.

Conclusions. Whether HDHPs are associated with lower costs is far from settled. Various subgroups of enrollees may choose HDHPs for different reasons and react differently to plan incentives.

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