Dr Niteesh Choudhry Discusses Consumer Reactions to HDHPs

Changes with insurance products have led to more costs being shifted to consumers and they are having very mixed emotions when faced with high-deductible health plans, explained Niteesh Choudhry, MD, PhD, associate professor of medicine at Harvard Medical School.

Transcript (slightly modified)

How have insurance products been changing, and what is driving this change?

So I think the biggest change in health insurance is actually not new, it’s sort of a progressive change that’s happened over the past decade, which is increasing premiums, increasing deductibles, increasing out-of-pocket costs for patients.

I think there are lots of reasons for these changes, but certainly, at least in the employer market, it’s driven by the employers needing to reduce these costs. They have short-term incentives to reduce how much they spend on healthcare, and the easiest way to do that is to shift costs to consumers, to have consumers put more skin in the game and be cost-conscious about their choices.

What has been consumer reaction to new benefit designs like high-deductible health plans?

I think consumers have mixed emotions about these plans. So on one hand the idea that they face a very low premium at the time of signing up for a plan is very attractive, therefore many people sign up and believe that they’re healthy, or are unlikely to use or to need services. And that’s a very positive kind of reaction.

On the other side, there are really two facets. So the first is that people tend to not understand the plans, the plans are very complicated, and people who are most at risk—those with chronic conditions, those who have lower income, those who are of non-white race or ethnicity—tend to select and use the plans in ways that the plans are not really designed to, and this leads them to worse care.

So on the negative side, the plans cause confusion in and of themselves.