Date post: | 24-Dec-2015 |
Category: |
Documents |
Upload: | peter-walker |
View: | 215 times |
Download: | 0 times |
Health Savings Accounts: Assessing their impact on Insurance and Coverage Costs Stephen T Parente
Roger FeldmanJean AbrahamJon B Christianson
Funded by the Robert Wood Johnson Foundation Health Care Financing and Organization Initiative (HCFO) and the Department of Health and Human Services
Presentation Overview
Consumer Driven Health Plan Overview
Research Questions Data & Analytic Approach Plan Choice Estimation Results Policy Simulation Results Implications Next Steps
‘Classic’ CDHP Model – Definity Health
Definity Definity HealthHealthCareCare
AdvantageAdvantage
Web- and Web- and Phone-Phone-Based Based ToolsTools
Health ToolsHealth Toolsand Resourcesand Resources
Health Tools and Resources• Care management
program• Internet enabled
Health Coverage• Preventive care covered
100%• Annual deductible• Expenses beyond the
HRA
Health Reimbursement Account (HRA)• Employer allocates HRA1
• Member directs HRA• Roll over at year-end • Apply toward deductible2
Annual Annual DeductibleDeductible
Annual Annual DeductibleDeductible
Pre
ven
tive
Care
10
0%
Pre
ven
tive
Care
10
0%
Health Health CoverageCoverage
An
nu
al
Ded
uct
ible
1 Employer selects which expense apply toward the Health Coverage annual deductible.2 Paid out of employer’s general assets.
HRAHRAHRAHRA
$$
The Health Savings Account (HSA) Model
HSAs legislated in
MMA 2003.
Pretty similar to
Definity Health HRA
Design except
the consumers owns
the account.
Annual Annual DeductibleDeductible
Annual Annual DeductibleDeductible
Pre
ven
tive C
are
P
reven
tive C
are
1
00
%1
00
%
Health Health CoverageCoverage
An
nu
al
Ded
uct
ible
HSAHSAHSAHSA
$$
Economic Analysis Motivation ‘Donut hole’ and savings account are new
‘prices’ to consider in the demand for health insurance with expected negative and positive responses, respectively.
Price sensitivity to different benefit options (i.e., premium, account, donut, coinsurance) could significantly affect take-up of CDHPs.
Builds on existing literature of high deductible health plans (HDHPs) (Keeler, Newhouse, Phelps, 1977). HSAs introduce a new kink in the budget constraint.
Conceptual Model of CDHPMoney
Medical Care
CDHP Budget
CoinsurancePlan Budget
b
a
c
Low Use Medium Use High Use
Data Sources
2002 health plan choice data from 3 large employers participating in a Robert Wood Johnson Foundation funded study on CDHPs Employee premium, deductible, coinsurance,
worker’s age, gender, wage income, single/family coverage
2001 Medical Expenditure Panel Survey (MEPS) Household Component Linked Insurance Component
eHealthinsurance.com Individual HSA plan information
Plan Choice Model Analytic Approach Plan Choices: HMO, 3 PPOs (low, medium, high), 2
CDHPs with Health Reimbursement Accounts (low and high)
Utility-maximization assumption where Uhj = j + Zj + Xhj + ehj
Estimate a conditional logit model of plan choice using the pooled, employer data
Explanatory variables Plan attributes (Z)
Annual tax-adjusted employee premium ($1000s dollars) Savings/reimbursement account size ($1000s dollars) Donut hole: difference between annual deductible and
account size ($1000s dollars) Coinsurance rate (i.e., .10 = 10% coinsurance)
Interactions between employee and plan attributes (X) Age, female, wage income, family contract
Plan-specific constants (j )
Plan Choice – Descriptive Statistics
Total Low HRA* High HRA HMO Low PPO Med PPO High PPO
Observations 28,737 821 2,734 9,254 1,685 8,276 5,967
Employee Premium in $1,000 0.627 0.591 0.489 0.164 0.973 0.499 1.491
Health Account in $1,000 0.169 0.859 1.513 -- -- -- --
Donut Hole in $1,000 0.336 1.507 0.983 -- 0.797 0.326 0.284
Coinsurance 0.084 0.074 0.021 0.033 0.200 0.108 0.128
Female, 1=female, 0 else 0.514 0.474 0.413 0.540 0.500 0.532 0.504
Age (scaled in 100 years) 0.419 0.426 0.415 0.419 0.426 0.417 0.407
Income in $1,000 47.81 55.91 83.28 40.98 36.21 45.35 47.73
Family contract=1, else 0 0.528 0.481 0.681 0.435 0.595 0.541 0.571
* We use a Low HRA in our simulations for approximating an HSA benefit design.
Price elasticity estimates from the plan choice model
PriceVariable Elasticity
Tax adjusted Employee Premium in $1,000 -0.9213
Employee's Health Account in $1,000 0.0885
∆ Between Deductible and Health Account in $1,000 -0.2430
Coinsurance (e.g., 15% = .15) -0.5405
Policy Simulations Baseline take-up of HSAs from the Medicare Modernization Act
of 2003 Simulation (1): Bush Administration’s proposal
Refundable tax credit up to 90% of premium; maximum of $1000/adult, $500/child (up to two)
Subsidy for singles with no dependents phased out at $30,000 adjusted gross income and $60,000 for families
Simulation (2): Low income buy-in subsidy
Simulation (3): Full subsidy of HSA premium
Simulation (3a): Full subsidy of HSA premium for “generous” HSA policy
Simulation (4): Full subsidy of HSA premium for the non-working, non-public insurance population
Cross price-elasticity* of uninsured take-up with respect to HSA premium subsidy
*Calculated as the MEPS survey-weighted average of each person’s:
-(pr uninsured|status quo - pr uninsured|Δ HSA premium) * (HSA premium @status quo/pr uninsured|status quo)
Single Adults withIncome Quartile Adults Dependents
0 to 25 0.080 0.039
25 to 50 0.138 0.107
50 to 75 0.498 0.250
75 to 100 0.754 0.378
All 0.205 0.107
Cross price-elasticities of uninsured take-up with respect to “donut hole” and account
with respect to a with respect to a Income Quartile decrease in donut increase in account size
0 to 25 0.070 0.039
25 to 50 0.147 0.076
50 to 75 0.408 0.179
75 to 100 0.587 0.233
All 0.175 0.082
Cost per newly insuredEstimated
reduction in uninsured
Total EstimatedAnnual Cost
Per CapitaCost
Administration’s Proposal (Sim#1)
2,924,949 $8,075,081,354 $2,761
Low-income Buy-In (Sim#2) 4,495,887 $12,219,668,960 $2,718
Full subsidy (Sim#3) 12,819,856 $69,214,319,880 $5,399
Full subsidy Generous HSA (Sim#3a)
23,507,540 $211,118,893,800 $8,981
Full subsidy Non-working (Sim#4)
3,143,487 $11,234,374,714 $3,574
Policy Implications Take-up elasticity comparisons
-.3 to -.4 in the non-offered population (Marquis et al, 2004) – Ours are similar.
Take-up elasticity increases as income increases. This contrasts with the literature. Why? Probability of HSA take-up is positively correlated
to income (as opposed to an HMO, which is usually negatively correlated).
Implication is that lower income population need more inducement to take-up an HSA
Plan design matters. Greater take-up from a reduction in the donut
hole than an increase in the account size.
Summary Premium, coinsurance and Donut can
and ALL should be modeled when looking at CDHPs.
They different effects Policy proposals will need to consider
price effects to develop effective welfare improving social policy.
Next Steps Refine the model to account for the
following: Individual-level vs. Household-level Premium inflation assumptions
Examine impact of other policy proposals and/or HSA plan designs on take-up.
Look at HSA take-up versus retirement saving choice.
Price-Sensitivity Estimates from the Literature
Take-Up Non-offered population [Marquis and Long, 1995;
Marquis et al. 2004] -.3 to -.4
Offered population [Chernew et al., 1997; Shiels et al., 1999; Blumberg et al., 2001; Gruber and Washington, 2005] -.01 to -.2
Impact of the Simulations by Income
Income Quartile Sim1 Sim2 Sim3 Sim 3A Sim40 to 25 1,231,485 2,093,439 5,633,439 12,408,567 2,715,25325 to 50 952,335 1,081,301 3,451,260 6,247,978 273,80350 to 75 492,181 941,634 2,027,674 2,737,325 105,55975 to 100 248,948 379,513 1,707,484 2,113,671 48,872All 2,924,949 4,495,887 12,819,857 23,507,540 3,143,487
Income Quartile Sim1 Sim2 Sim3 Sim 3A Sim40 to 25 $1,819 $2,228 $3,264 $3,736 $3,42725 to 50 $2,021 $2,026 $3,421 $3,740 $3,52850 to 75 $2,967 $3,096 $5,544 $5,644 $6,41275 to 100 $5,123 $2,799 $6,363 $6,405 $5,876All $2,359 $2,409 $4,080 $4,199 $3,574
Reduction in the Uninsured
Average subsidy for take-up by previously uninsured
SIM Prep3 - Simulation Calibration
Applied CDHP employer plan choice model estimates to predict probabilities of plan choices for MEPS sample respondents
Model Calibrations % of adults who turn down employer offers
by income quartile % of adults in the individual market who are
uninsured by income quartile Applied national weights to the calibrated
model to represent the population 19-64, excluding full-time students, those enrolled in public insurance, and non-offered dependents with employer coverage through their spouse
Approximately 121.5 million adults
Baseline Impact of MMA 2003
NOTE: Population is 19-64, non public insurance
Baseline Baseline(unsubsidized) (unsubsidized)
Plan Choice Population % Project Pop.
HSA-Full Price 9% 3,155,982PPO_High $$ 13% 4,651,023
INDIVIDUAL PPO_Low $$ 1% 310,041MARKET PPO_Medium $$ 4% 1,426,040
Uninsured 74% 27,273,018
HMO 31% 26,295,237HRA 2% 1,811,281
EMPLOYER HSA-Shared Prem 1% 530,882INSURANCE HSA-Full Price 0% 332,249OFFERED PPO_High $$ 7% 5,930,246MARKET PPO_Low $$ 2% 1,571,384
PPO_Medium $$ 41% 34,949,793Turned Down 16% 13,298,512
Sim#1: Administration’s* Proposal
NOTE: Population is 19-64, non public insurance. *Proposal as interpreted fromFebruary, 2004 U.S. Treasury Blue Book.
Unsubsidized Simulation Unsubsidized Simulation %Plan Choice Population % Population % Project Pop. Project Pop. Change Subsidy CostINDIVIDUALHSA-Full Price 9% 19% 3,155,982 6,971,694 120.9% 6,900,791,439$ PPO_High $$ 13% 11% 4,651,023 4,017,191 -13.6% -$ PPO_Low $$ 1% 1% 310,041 263,278 -15.1% -$ PPO_Medium $$ 4% 3% 1,426,040 1,215,872 -14.7% -$ Uninsured 74% 66% 27,273,018 24,348,069 -10.7% -$
OFFEREDHMO 31% 31% 26,295,237 26,232,550 -0.2% -$ HRA 2% 2% 1,811,281 1,803,079 -0.5% -$ HSA-Shared Prem 1% 1% 530,882 528,590 -0.4% -$ HSA-Full Price 0% 1% 332,249 861,387 159.3% 1,174,289,915$ PPO_High $$ 7% 7% 5,930,246 5,921,970 -0.1% -$ PPO_Low $$ 2% 2% 1,571,384 1,569,135 -0.1% -$ PPO_Medium $$ 41% 41% 34,949,793 34,627,195 -0.9% -$ Turned Down 16% 16% 13,298,512 13,175,679 -0.9% -$
Sim #3A: Full Subsidy for Generous HSA
NOTE: Population is 19-64, non public insurance
Unsubsidized Simulation Unsubsidized Simulation % Subsidy CostPlan Choice Population % Population % Project Pop. Project Pop. ChangeINDIVIDUALHSA-Full Price 9% 88% 3,155,982 32,413,500 927.0% 98,708,233,232$ PPO_High $$ 13% 1% 4,651,023 458,476 -90.1% -$ PPO_Low $$ 1% 0% 310,041 29,904 -90.4% -$ PPO_Medium $$ 4% 0% 1,426,040 148,745 -89.6% -$ Uninsured 74% 10% 27,273,018 3,765,478 -86.2% -$
OFFEREDHMO 31% 24% 26,295,237 20,117,174 -23.5% -$ HRA 2% 1% 1,811,281 1,165,656 -35.6% -$ HSA-Shared Prem 1% 0% 530,882 327,143 -38.4% -$ HSA-Full Price 0% 37% 332,249 31,603,493 9412.0% 112,410,660,595$ PPO_High $$ 7% 6% 5,930,246 4,722,256 -20.4% -$ PPO_Low $$ 2% 2% 1,571,384 1,281,803 -18.4% -$ PPO_Medium $$ 41% 22% 34,949,793 18,528,647 -47.0% -$ Turned Down 16% 8% 13,298,512 6,973,413 -47.6% -$