High-deductible Health Plans and Better Benefit Design

Published In: Annals of Internal Medicine, v. 148, no. 9, May 2008, p. 704-701. W-139

Posted on RAND.org on May 01, 2008

by Anish P. Mahajan, Robert H. Brook

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High-deductible health plans are growing in policy and market prominence. These plans offer lower premiums than conventional insurance products but make enrollees pay high deductibles (the amount that a person must pay out-of-pocket before their health insurance plan pays benefits) for most types of care, including emergency department use, inpatient hospital services, diagnostic testing, and pharmaceuticals. Average deductibles in high-deductible health plans range from $1600 to $1900 for individuals and $3300 to $3900 for families. In 2007, approximately 10% of employers offered high-deductible health plans, and such plans covered about 3.8 million workers. By shifting more of the cost of care to individuals, advocates of high-deductible health plans believe that consumers will more carefully assess the balance of benefits versus costs of their health care choices, ultimately improving the efficiency and quality of care.

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