With approximately 10 million people covered in January, 2010, the High Deductible Health Plan (HDHP) is a benefits innovation that is well liked. This plan combines a deductible higher (minimum $1200 for single and $2400 for family) and a premium lower than traditional health insurance plans. Contributions made to the accompanying health savings accounts (HSAs) can be made in pre or post tax dollars, creating an attractive tax advantage. Employers can also contribute to employee HSAs and such h contributions do not count towards an employee’s taxable income
There is controversy, however, and it centers on the demographics of health benefit care. Opponents of HDHP plans say it clearly favors younger workers, who have lower claims experience, encouraging them to leave traditional plans which, in turn, must raise premiums. Critics also contend that the rich will make use of HDHPs to lower taxable income and the poor cannot afford the high deductibles. Counter arguments insist that HDHP rewards those who follow healthier life styles, regardless of age, and because of the high deductibles people covered by HDHP plans only use the benefit when they absolutely have to, making more cost efficient use of the benefit than those covered by more traditional health care plans.
These plans are beginning to feel the effects of mandated changes in health care. Public Law 111-148 deals with HDHPs in a number of ways and, one potentially expensive modification is first dollar coverage for preventive care services without co-payment or deductibles. The US Preventive Services Task Force will define what constitutes preventive care services and its interpretation of preventive care may force alterations in HSA administration. Limits on deductibles for small employers and limits on out of pocket expenses are also included in the recent health care legislation, as well as new definitions of what constitutes a qualified medical expense. Combined with upcoming regulations on actuarial value and medical loss ratio, the above changes are expected to have increasing impact on the administration of HDHP plans as time goes by.
Still, HDHP plans are popular health care plans and are not expected to go away any time soon. They will be amended as the new regulations come out of HHS and any further changes in tax legislation may also have influence on design and administration. HDHP plans by design have a major societal benefit: they encourage cost-efficient use of health benefits and heighten the appreciation of wellness programs as a means of saving on medical expenses.