ObamaCare vs. Consumer-Driven Care

A fair amount of evidence suggests that consumer-driven health plans, which typically pair high-deductible insurance with health savings accounts (HSAs), offer one of the most promising mechanisms for controlling the growth of health insurance premiums as well as overall health spending. Naturally, it looks like ObamaCare's insurance regulations will impact people with consumer-driven plans more than others, and make it hard for CDHP plans to survive.

According to a new study prepared for the American Bankers Association (ABA) by analysts from the consulting group Milliman, high deductible health plan costs are likely to increase faster than on other types of plans thanks to new rules governing health plans' medical loss ratios (MLRs), which require health insurers to spend at least 80 or 85 percent of their total premium revenue on federally defined clinical services. One reason why the MLR rules are expected to hit CDHPs is that they don't count HSA dollars, despite the fact that high-deductible plans are often matched with HSAs. That makes it harder for the the high-deductible plans to meet the MLR standards. That could have consequences for many of the roughly 10 million individuals enrolled in such plans: In a statement, the ABA warned that "consumers who rely on HSA-qualified plans to finance their health care may experience greater costs in their current health plans and may eventually have to find more expensive replacement coverage."

Study link via John Goodman of the National Center for Policy Analysis. More on ObamaCare's MLR regs here and here.