Business Case for Employers
The Patient Protection and Affordable Care Act (ACA) incorporated value-based insurance design principles in Sections 2713 and 4105 to prioritize both quality and cost efficiency of care. An estimated 76 million Americans have expanded coverage due to the inclusion of V-BID in the ACA.
On July 17th, 2019, in response to a June executive order, the U.S. Department of Treasury released Notice 2019-45, allowing HSA-HDHP plans the flexibility to cover specified medications and services used to treat chronic diseases prior to meeting the plan deductible. The long-awaited announcement is the result of over a decade of advocacy by the University of Michigan V-BID Center and its many collaborators.
With these policies in place, all high-deductible plans are now able to adopt a more flexible benefit design offering more protection for certain medical services through a value-based insurance design plan structure. As the market for HSA-eligible HDHPs grows, it is important that these plans use this flexibility to allow for effective health management for all beneficiaries. A targeted strategy exploring coverage for certain high-value, clinically-indicated health services prior to meeting the deductible will produce more effective clinically-nuanced designs, without fundamentally altering the original intent and spirit of these plans.
By expanding the IRS “safe harbor” to include certain chronic disease management care, the recent IRS guidance increases the attractiveness and clinical effectiveness of HSA-HDHPs and better aligns consumer engagement with provider payment reform initiatives. Adoption of this voluntary, clinically-nuanced expanded HDHP has the potential to mitigate cost-related non-adherence, enhance patient-centered outcomes, allow for lower premiums than most PPOs and HMOs, and substantially reduce aggregate health care expenditures. The clinically-nuanced HDHP would provide millions of Americans a plan option that better meets their clinical and financial needs.