A rule issued by the Internal Revenue Service opens up the ability for high deductible health plans (HDHP) to cover preventive services and medications prior to meeting the plan deductible.
The move was made in response to an executive order signed last month that was meant to inject more flexibility into how health savings account eligible high deductible health plans could pay for health services critical to management of chronic diseases.
The new rule from IRS changes the classification of many health services and medications meant to treat and manage chronic conditions as preventive care.
These products and services include insulin, ACE inhibitors, inhaled corticosteroids, retinopathy screenings, glucometers, statins and SSRIs. A full list of covered items can be found here.
As healthcare costs have continued to rise many plan sponsors have turned to high deductible health plans as a way to make members most conscious of their health spending.
These are often coupled with a health savings account (HSA), which allows pretax dollars to be saves to be pay for healthcare costs.
By changing the classification of medications and services that manage chronic disease, patients can use their HSA to pay for them, which was previously barred under the tax code.
Between 2007 and 2017, the proportion of employer-based health coverage members with HDHPs with an HSA grew from 4.2 percent to 18.9 percent, according to data from the CDC.
For 2019, the IRS defines a HDHP as one where the deductible is at least $1,350 for an individual or $2,700 for a family. Those numbers go up next year to $1,400 and $2,800, respectively.
The benchmarks can lead to difficult fiscal decisions for patients who are forced to pay high out-of-pocket costs for services or products that may have large clinical impact and downstream cost savings.
Research has repeatedly shown that high deductibles lead patients to forgo high value preventive health services, especially among those who are low-income or have chronic diseases.
“For the first time health savings accounts qualified high deductible health plans will be able to cover essential services that I beg my patients to do,” said Dr. Mark Fendrick, the director of the University of Michigan’s Center for Value Based Insurance Design.
“These include diagnostic tests and high value drugs such as those which treat diabetes, high blood pressure and heart disease.”
Photo: adventtr, Getty Images
