High Deductible Health Plans: Enrollee Characteristics and Burdens

News articles point to difficulties facing enrollees in high deductible plans when they need health care. Historically, high deductible health plan enrollees have on average been of higher socioeconomic status, and their plans were accompanied by health savings accounts (or similar fund/account) to help pay for care with pre-tax income. Little is known about whether these characteristics have changed as enrollment in employment-based high deductible health plans has increased in recent years. In this study, we use household data from the Medical Expenditure Panel Survey (MEPS) to study the socioeconomic and demographic distribution of individuals covered by employment-based and non-group high-deductible health plans, distinguishing between those with and without a choice of plans, and between those with and without health savings accounts.

MEPS is a nationally representative survey with detailed information on demographics, socioeconomic status, and health insurance coverage of individuals, as well as information that can be used to determine whether a given individual who was offered employer-sponsored insurance (ESI) had either a choice of plans offered by the worker’s own employer or a choice between coverage through the worker’s or spouse’s employer.  We pool three years of MEPS, 2011 to 2013, in order to increase the precision of our estimates.

We compare four groups – those covered by high-deductible plans which are associated with HSAs or similar fund/account (HDHPs with HSA), those covered by high-deductible plans which are not associated with such an account (HDHPs w/o HSA), those covered by low-deductible plans (LDHPs), and those covered by no-deductible plan (NDHPs).  Our preliminary results suggest that among all ESI covered adults, 68% had a choice of plans.  Among those with choice, we see only modest differences in income and education across groups.  The 9.2 percent who selected HDHPs with HSAs tended to have higher income and higher education than the 11.7 percent with HDHPs without HSAs, with the low and no deductible groups having incomes and education levels between these two HDHP groups (differences between the HDHP and low or no deductible groups are not always statistically significant).  Somewhat surprisingly, we observed even greater differences in income and education among those without choice, with the 6.5 percent holding HDHPs with HSAs having substantially higher incomes and more education than the 16.0 percent with HDHPs without HSAs or those with low or no deductible plans.  With or without choice, we observe that adults covered by HDHPs with HSAs are substantially more likely to be white non-Hispanic and located in the Midwest, compared to the other groups.  Other dimensions of plan choice studied include:  industry, age and health status, and marital status.

Our final area of analysis investigates the frequency of high out-of-pocket expenditure burdens by coverage group and by income level.  In particular, we examine out-of-pocket expenditures on health care as well as on premiums, accounting in each case for whether expenditures are paid by pre-tax or post-tax dollars.