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Refining Our Understanding of Value-Based Insurance Design and High Cost Sharing on Children
Randall P Ellis1, Sara S Bachman2, Hui Ren Tan3
1Department of Economics and ellisrp@bu.edu.
Insights
Value-based insurance designs (VBID) with high cost-sharing do not significantly reduce children's health care spending. These plans place substantial financial burdens on families, especially those with children and youth with special health care needs (CYSHCN).
Area of Science:
- Health Economics
- Pediatric Health Services Research
- Health Insurance Policy
Background:
- Growing popularity of value-based insurance design (VBID) plans raises concerns about financial burdens on families.
- Particular concern exists for families with children and youth with special health care needs (CYSHCN).
Purpose of the Study:
- To examine the implications of selected VBID cost-sharing features on children's healthcare spending.
- To assess the financial impact of different insurance plan designs on families.
Main Methods:
- Analysis of Medical Expenditure Panel Survey (2007-2013) and MarketScan claims data (2007-2014).
- Studied out-of-pocket (OOP) costs for children, considering CYSHCN status, family income, and spending levels.
- Compared mean total payments and OOP costs across various health plans, including high deductible and narrow network plans.
Main Results:
- Existing health plans impose significant financial burdens, especially on lower-income families and those with CYSHCN.
- Top 10% of OOP spending averaged over $2000 per child.
- High deductible and consumer-driven plans increased OOP costs without significantly reducing overall spending.
- Health maintenance organizations with network restrictions reduced spending.
Conclusions:
- High cost-sharing features common in VBID plans are unlikely to significantly reduce healthcare spending on children.
- Current insurance designs may exacerbate financial strain on vulnerable families.
Background:
There is significant concern about the financial burdens of new insurance plan designs on families, particularly families with children and youth with special health care needs (CYSHCN). With value-based insurance design (VBID) plans growing in popularity, this study examined the implications of selected VBID cost-sharing features on children.
Methods:
We studied children's health care spending patterns in 2 data sets that include high deductible and narrow network plans among others. Medical Expenditure Panel Survey data from 2007 to 2013 on 22 392 children were used to study out-of-pocket (OOP) costs according to CYSHCN, family income, and spending. MarketScan large employer insurance claims data from 2007 to 2014 (N = 4 263 452) were used to test for differences in mean total payments and OOP costs across various health plans.
Results:
Across the data sets, we found that existing health plans place significant financial burdens on families, particularly lower income households and families with CYSHCN; individuals among the top 10% of OOP spending averaged more than $2000 per child. Although high deductible and consumer-driven plans impose substantial OOP costs on children, they do not significantly reduce spending, whereas health maintenance organizations that use network restrictions and tighter management do.
Conclusions:
Our results do not support the conclusion that high cost-sharing features that are common in VBID plans will significantly reduce health care spending on children.
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