What Do Health Insurance Deductibles Do to Health Care Spending Growth and its Efficiency?
43 Pages Posted: 14 Dec 2021
Costly new technology, while often beneficial, has been identified as the principal driver of healthcare spending growth. Recent literature has shown high deductible health plans (HDHP) can have an immediate impact on levels of healthcare spending, but their medium and long run effects on spending growth remain unknown. Analyzing a panel of multiple-employer-group claims data from a national insurer, we find HDHPs have a limited effect on total spending growth, with a statistically significant reduction observed only in the first-year post-switch from a LDHP to a HDHP plan. HDHPs do, however, reduce spending growth over time for prescription drugs, lowering growth for less cost-effective drugs but not affecting growth in spending on highly cost-effective medicines.
Keywords: Health Insurance, High Deductibles, Spending Growth
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