title: How low can you go? The impact of reduced benefits and increased cost sharing.
abstract: Amid escalating health care costs and a managed care backlash, employers are considering traditional cost control methods from the pre-managed care era. We use an actuarial model to estimate the premium-reducing effects of two such methods: increasing employee cost sharing and reducing benefits. Starting from a baseline plan with rich benefits and low cost sharing, estimated premium savings as a result of eliminating five specific benefits were about 22 percent. The same level of savings was also achieved by increasing cost sharing from a 15 dollars copayment with no deductible to 20 percent coinsurance and a 250 dollars deductible. Further increases in cost sharing produced estimated savings of up to 50 percent. We discuss possible market- and individual-level effects of the proliferation of plans with high cost sharing and low benefits.
authors.affiliation: Academy for Health Services Research and Health Policy, Washington, DC, USA.
authors.forename: Jason S
authors.initials: JS
authors.lastname: Lee
authors.forename: Laura
authors.initials: L
authors.lastname: Tollen
mesh_terms: D000206:Actuarial Analysis; D003363:Cost Control / Q000379:methods; D017047:Cost Sharing / Q000639:trends*; D005249:Fees and Charges; D006264:Health Benefit Plans, Employee / Q000191:economics*; D006279:Health Maintenance Organizations / Q000191:economics*; D006801:Humans; D007342:Insurance Benefits / Q000145:classification / Q000191:economics; D017146:Models, Organizational; D009936:Organizational Innovation; D014481:United States