Question

What effect on consumer search would you predict from the growing popularity of high-deductible health plans that have per-person deductibles of $1,300 per person ($2,600 per family)?Please explain.

Answer 1

The effect on consumer search that can be predicted from the growing popularity of high deductible health plans is as follows:
HDHPs have become increasingly popular since the Medicare Modernization Act of 2003 .
* These plans are an effective mechanism for controlling health care cost by creating cost -conscious health care consumers those look for "health care value".
*There are warnings that HDHPs are tailor made for young ,healthy, and sophisticated consumers ,and that the widespread availability of these plans can create a "seperating equillibrium "that only benefits low cost -users leaving the sickest and oldest patients in the traditional plans , making these plans more expensive
* Adverse effects those sicker old patients who do end up in HDHPs by giving them incentives to choose less care initially and resulting in higher morbidity and overall expenditures for these individuals.
* HDHPS enrollments was associated with reduced emergency room use , increase in prescription medication use , and no change in overall outpatient expenditures.
* The impact on HDHPs on utilization differed by subgroup .chronically ill enrollees and those who clearly had a choice of plans were more likely to increase utiliazation in specific categories after switching to a HDHP plan.
* Primary care physician and ER visits were lower in the HDHP group while specialist visits were higher .
* HDHP plans may impact specific types of health care use in ways consistent with the intent of the HDHP s there is a reduction in primary care use ,increased generic drug use and rise in specialist visit.
CONCLUSION
These plans may attract younger individuals with higher literacy younger generations are more likely tto ask doctors for less expensive generic prescription drugs for treatments and utilize cost- tracking tools in order to manage healthcare costs.
Payers should make sure that the plan benefits align with consumer needs that effectively encourage smart healthcare utilization and meet the priorities in different finacial circumstances .