Report finds employers are increasingly dissatisfied with high-deductible health plans


July 22, 2022

By Sherry Pitcher

When high-deductible health plans (HDHPs) were introduced in the early 2000s, many expected a new era of healthcare consumerism. HDHPs were expected to foster improved decision-making, which would help contain the rising cost of prescription medication and medical services. By providing patients and their physicians with transparent cost the goal was to mitigate trend with patient purchasing the least expensive medications and medical services.

Those lofty expectations, unfortunately, have not been fully realized.

Our 2022 Trends in Drug Benefit Design Report shows lower employer satisfaction with HDHPs compared to when we last conducted this survey in 2018. For example:

  • There was less confidence that HDHPs help manage the overall drug spend (35% in 2022, compared to 41% in 2018)
  • There was also a reduced belief that HDHPs make members better healthcare consumers or make wiser medication choices (51% in 2022, compared to 58% in 2018)

Some experts once believed HDHPs would replace PPO/EPO plans, but the data shows that 91% of employers report offering PPO/EPO health plan options. In comparison, 73% of employers offer HDHPs with a health savings accounts (HSA) while 6% offer HDHPs with a health reimbursement account (HRA).

 


 

The Reality of HDHPs

What accounts for the diminishing confidence in HDHPs?

Patients can be overwhelmed by the choices afforded by HDHPs and often have little experience or knowledge to making informed choices. Physicians can be reluctant to engage in a financial conversation with patients to discuss alternative prescription options or care delivery sites, leaving members uncertain about the best decision to make for their healthcare and financial needs. Even with transparency and navigation tools, the healthcare space can be intimidating and difficult to navigate, which has limited the impact of “shopping” for care, thus, diminishing HDHPs ability to manage trend.

In our 2022 report, the most cited top challenges for HDHP members included:

  • Lack of affordability of medications prior to meeting deductibles (22%)
  • Lack of understanding of using their HSA/HRA (19%)
  • Delaying or forgoing needed care due to deductible amount (16%)

The role of specialty drugs and drug rebates also contribute to the perceived shortcomings of HDHPs. More expensive specialty medications are available to treat more health conditions than when HDHPs were introduced. That trend is expected to continue as the pipeline of specialty drugs continues to be strong, including medications for higher prevalence diseases such as asthma and skin conditions. The affordability of specialty drugs is challenging for HDHP participants who are responsible for paying for the full cost of drugs before meeting their deductible.

Rebates are often used by plan sponsors to reduce premiums for all employees. Pharmacy Benefit Managers (PBMs) use rebates to negotiate favorable pricing with pharmaceutical companies, but patients do not realize those savings directly. HDHP members are faced with the “gross price” of the medication at the pharmacy counter and the rebate is paid to the plan later. For certain medical expenses (e.g., emergency room visits and hospitalizations) patients can establish payment plans with the provider; however, pharmacies require payment when the prescription is filled. This dilemma challenges HDHP participants who experience “sticker shock” at the pharmacy counter. While programs such as copay assistance and non-profit foundations for some high-cost specialty therapies are available, this is limited. Many HDHP participants could be reluctant to fill high-cost prescriptions if they don’t receive financial assistance. Until more biosimilars are introduced, specialty drugs lack less expensive alternatives and substitutes, leaving members with few choices.

 


 

What’s Next for HDHPs

Most employers no longer view HDHPs as the only plan design offering in their portfolio. They recognize that there are employees who value HSAs as a savings and tax planning vehicle as well as an attractive and viable option for more risk-tolerant employees that prefer to have a lower paycheck contribution.

For other members, the upfront cost to reach their deductible can be overwhelming and confusing and these employees are willing to pay more in employee contributions for a more predictable experience at the pharmacy counter or physician’s office by selecting a more traditional PPO/EPO plan.

To help with medication compliance, some employers are customizing their pharmacy benefits to ensure their HDHP members can access medications for chronic conditions, such as high blood pressure or diabetes, often at low or $0 copays. HDHPs aren’t the imagined “silver bullet” for employers seeking to contain healthcare and prescription benefit costs, but they do provide employers with a path to offer a diverse portfolio of plans to improve attraction and retention of employees.

 


 

Download Trends in Drug Benefit Design Report