Dr Mark Fendrick Discusses Underinsurance Worries and Possible Solutions

Underinsurance, which occurs when people have insurance but aren’t covered for services they need, is a serious problem in the US, according to A. Mark Fendrick, MD, director of the Center for Value-Based Insurance Design at the University of Michigan. He proposed some strategies to alleviate this phenomenon, like smarter deductibles and revised Internal Revenue Service (IRS) rules.

Transcript (slightly modified)

What are the challenges of underinsurance, and what strategies can be used to reduce underinsurance in the United States?

One of the good news about the healthcare reform environment that we’ve seen is the dramatic reduction of people who are uninsured. So we have millions of more people who now have insurance policies. Unfortunately, many of these plans do not cover essential services to the level I would like to see. Whether it be copayments, co-insurance, or deductibles, we are seeing a significant rise in what we call cost-related non-adherence, or people not getting the services they need, simply because of cost, even when they have insurance.

Underinsurance, as we call this, or insured but not covered, as I like to say, is a real and growing problem. One way to reduce underinsurance is to provide patients or consumers the ability to access high-value services with little or no out-of-pocket expenditures. This is the basic premise of value-based insurance design.

So we’ve been trying to integrate value-based insurance design into high-deductible health plans, for instance. I strongly support high deductibles on the services that Americans shouldn’t buy, those services that don’t make them healthier. At the same time, I do not want to see my patients faced with high out-of-pocket charges for the things I beg them to do.

One of our top initiatives this year is actually to convince the Internal Revenue Service that overseas jurisdiction on high-deductible health plans to allow a greater number of services to be covered in a high-deductible health plan before the deductible is met. So preventive care services, cancer screenings, and counseling, are currently allowed to be covered in a high-deductible health plan before the deductible is met. But because of the IRS rule, services for pre-existing conditions tend not to be. That’s insulin for diabetics. That’s CD4 counts and anti-AIDS drugs for people with HIV/AIDS. Things that we know are quality measures.

So we’d like to see smarter deductibles. In other words, low deductibles on those services that are quality metrics, and higher deductibles on those things for which the evidence is weak of benefit, such as those services listed in the Choosing Wisely initiative.