Health Insurance Rule Change Could Help Millions of Chronic Disease Sufferers Spend Less for the Care They Need Most
A new federal rule could reduce out-of-pocket costs for key drugs and services for people with chronic conditions in high-deductible health plans with health savings accounts
Millions of Americans with chronic conditions could save money on the drugs and medical services they need the most if their health insurance plans decide to take advantage of a new federal rule.
The idea behind the rule was born at the University of Michigan.
This week, the U.S. Department of the Treasury gave health insurers more flexibility to cover the cost of certain medications and tests for people with common chronic conditions who are enrolled in many high-deductible health plans.
The rule change came about in part because of research and over a decade of health policy engagement by U-M professor A. Mark Fendrick, M.D., and his colleagues at the U-M Center for Value-Based Insurance Design.
About 43 percent of adults who get health insurance through their jobs have a high-deductible plan, which requires them to spend at least $1,300 out of their own pockets before their insurance starts covering their care, or $2,600 if they cover dependent family members.
People with high-deductible health plans typically have to pay the entire cost for services used to manage chronic conditions – such as inhalers for asthma, blood sugar testing and insulin for diabetes, and medicines to treat depression and high cholesterol – until they have reached their plan deductible.
More than half of them have access to a special kind of tax-advantaged health savings account to save money for their healthcare costs, and some employers contribute to those accounts.
But until today, the federal tax code specifically barred high-deductible plans with health savings accounts, or HSA-HDHPs, from covering drugs and services for common chronic conditions until enrollees met their deductibles. Such coverage could reduce the chance that people with chronic conditions will skip preventive care visits because of cost, and improve their longer-term outcomes.
Meanwhile, the bipartisan Chronic Disease Management Act of 2019 was introduced in the Senate and House of Representatives last month with the same goal of lowering out-of-pocket costs for Americans with chronic conditions confronting high plan deductibles.
"As more and more Americans are facing high deductibles, they are struggling to pay for their essential medical care," says Fendrick, a professor at the U-M Medical School and School of Public Health and an internal medicine physician at Michigan Medicine. "Our research has shown that this policy has the potential to lower out-of-pocket costs, reduce federal health care spending, and ultimately improve the health of millions diagnosed with chronic medical conditions. We have actively advocated for this policy change for over a decade.”
Specific coverage for specific enrollees
The new rule designates 14 services for people with certain conditions that high-deductible health plans can now cover on a pre-deductible basis.
The list closely aligns with the one laid out by the V-BID Center in a 2014 analysis. That report, based on clinical evidence available at the time, shows that these tests and treatments could help people with chronic diseases manage their health and detect or prevent the worsening of their conditions at a lower cost.
The list includes:
ACE inhibitor drugs for people with heart failure, diabetes and/or coronary artery disease
Bone-strengthening medications for people with osteoporosis or osteopenia
Beta-blocker drugs for people with heart failure and/or coronary artery disease
Blood pressure monitors for people with hypertension
Inhalers and peak flow meters for people with asthma
Insulin and other medicines to lower the blood sugar of people with diabetes
Eye screening, blood sugar monitors and long-term blood sugar testing for people with diabetes
Tests for blood clotting ability in people with liver disease or bleeding disorders
Tests of LDL cholesterol levels in people with heart disease
Antidepressants called SSRIs for people with depression
Statin medications for people with heart disease and/or diabetes
The new Treasury guidance also leaves the door open to allow high-deductible plans more flexibility in the future for coverage of other preventive services for people with these and other chronic conditions.
Fendrick and Harvard University professor Michael Chernew, Ph.D., , articulated the need for regulatory changes to level the playing field for people with chronic conditions in high-deductible health plans in the Journal of General Internal Medicine article in 2007.
V-BID principles – based on the idea that the highest-value clinical services should cost the least to people who need them most – have also made their way into other kinds of health insurance plans.
For instance, Medicare Advantage plans, offered by private insurers to people over age 65 and with disabilities, are now able to offer plans with value-based co-pays. So are plans offered under TRICARE, the insurance program for military families, and private employer-sponsored plans without high deductibles.
The V-BID team has recently introduced V-BID X, a novel benefit design to expand options in the individual market by enhancing coverage of essential medical services and drugs without increasing premiums or deductibles.
In addition to his role as the Director of the U-M Center for Value-Based Insurance Design, Fendrick serves as a consultant to several public and private organizations and is a founding partner of V-BID Health, a company that assists employers, health insurance plans, and health systems in designing health care benefits packages.