June 28, 2017

Executive order could expand coverage for chronic conditions under high-deductible plans

Daily Briefing

    A draft executive order that surfaced last week would change federal rules on which health care services high-deductible health plans (HDHPs) must cover before enrollees meet their deductible requirements.

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    The percentage of U.S. adults enrolled in employer-based, high-deductible HDHPs has increased since 2011, according to a report released earlier this month by CDC's National Center for Health Statistics. The report stated that the percentage of U.S. adults with employer-sponsored coverage who were enrolled in HDHPs grew from 26.3 percent in 2011 to 39.3 percent in 2016.

    Draft order details

    According to Modern Healthcare, HDHPs linked with health savings accounts under current IRS rules must cover only preventive health care services before enrollees meet their deductible requirements. Enrollees typically must pay for all other care, including clinically recommended care for chronic conditions, out-of-pocket until they meet their deductibles, at which point their coverage kicks in.

    However, the draft executive order would direct IRS to change its rules to require HDHPs to cover care for chronic conditions before enrollees meet their deductible requirements, Modern Healthcare reports. The draft executive order did not contain details on which services or treatments would be covered under the change. Andrew MacPherson, co-director of the Smarter Health Care Coalition and a principal at Healthsperien, said those determinations likely would be made by IRS.

    Supporters say draft order could increase access to care, enrollment in HDHPs

    Supporters of the draft executive order say it would remove barriers that can cause individuals with chronic illnesses to delay needed care because of high out-of-pocket costs. MacPherson said, "A lot of times, patients delay care because the deductible is so high." He called the draft executive order's proposed changed "a common-sense policy to ensure that individuals [enrolled in HDHPs] get the care they need."

    Some observers said the order could bolster enrollment in HDHPs, which, according to research, can reduce costs for insurers and employers that offer the plans, Modern Healthcare reports.

    Mark Fendrick, co-founder and director of the University of Michigan Center for Value-Based Insurance Design, said people in the past have been slow to enroll in HDHPs because they are concerned about high out-of-pocket costs. However, Fendrick said the change proposed in the draft executive order could make the plans more attractive because the plans ultimately would "lower deductibles, enhance coverage, and lower health care costs in the aggregate."

    Tracy Watts, a senior partner and health reform leader at Mercer, said the proposed change also could help employers, which "don't want cost to be a barrier for members with chronic conditions ... to be compliant with their condition management plan" (Livingston, Modern Healthcare, 6/26).

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