High-Deductible Health Plans Hurt Low Income Workers

High-deductible health plans have grown quickly over the past decade. 29% of workers are enrolled in these low-cost, minimal-coverage plans, up from 5% ten years ago.

A recent study shows that, unsurprisingly, these skimpy plans hurt lower income workers much more than higher income workers. Workers with less than $50,000 per year in income reduced their outpatient procedures by twice as much as higher income workers. This same pattern held for important preventive services such as primary-care office visits and flu vaccinations. 

Interestingly, the study also found that emergency room visits and inpatient hospital admissions increased for low income workers while higher-income workers saw no change.

At the bargaining table, we should be aware of this effects on low-income workers and look for ways to level the playing field. 

1. Monthly worker contributions for coverage can either be set as a percentage of income or reduced for low-income workers to make the benefit more progressive.
2. Plan design elements, such as deductibles and out-of-pocket maximums, can also be reduced for workers with lower wages.

Links:

Survey of Employer Benefits Finds Continued Cost-Shifting (CWA Health Care & Retirement Security Blog, Sept 27, 2016)

The Impact of an HSA-Eligible Health Plan on Health Care Services Use and Spending by Worker Income (Employee Benefits Research Institute, August 2016)