Lower copays and health engagement: the latest from EBRI

In an era where employers and benefit plans are embracing consumer-driven health plans and health reimbursement accounts, enrollees have seen their out-of-pocket costs for health care increase. Higher cost burdens have led to many health consumers to behave as, well, consumers -- self-rationing themselves off of various health services to conserve health spending.

Most Americans believe that lowering cost sharing would increase health engagement -- that is, better health behaviors -- for people who are participating in wellness and health programs as well as for people on drug regimens managing chronic conditions.

These findings come from the Employee Benefits Research Institute (EBRI), which has surveyed public opinion on lower cost sharing as an incentive to motivate consumers' health engagement. The May 2009 issue of EBRI Notes shares the details on lower cost-sharing found in the 2008 EBRI/MGA Consumer Engagement in Health Care Survey.

Underneath this top-line finding are some differences between people who rate themselves as healthy versus those who are not in good health. Healthier citizens are more supportive of lowered cost sharing than people who aren't as healthy. Specifically, obese people and those who smoke are less likely than people with healthier lifestyles to support lowered cost sharing for health-engaged patients.

Furthermore, men are more likely than women to believe that cost-sharing should vary with one's engagement in health care by a factor of 10-15 percentage points for each of the five areas of cost-sharing measured, shown in the table. There are no clear patterns of difference when looking at other demographic groups, such as age cohorts, income levels, or ethnic identification.

Health Populi's Hot Points: The era of consumer-driven health has often been unhealthy for participants when co-pays and payments out of health reimbursement accounts have motivated enrollees to delay necessary care.

More enlightened employers and benefit sponsors have begun to embrace the concept of value-based benefits, taking a kind of life-cycle approach to benefit plan design. This approach hasn't been popular among health plan companies in the past because of plan member 'churn' and the thought that plans wouldn't reap the benefits of investing in member health in a current plan year when the member might not be part of the plan's pool in a year or two or three.

The idea of "nudging" health citizens toward better health behaviors is gathering steam thanks to the book written by Sunstein and Thaler. Sunstein, now head of President Obama's White House Office of Information and Regulatory Affairs (OIRA), will influence the nation's regulatory regime with his lens on "libertarian paternalism." We can look forward to this influence shading public policy.

In the meantime, the private sector has begun to incorporate nudging in health plans due to employers' pressure to do more with existing resources (and premiums). While EBRI's survey recognizes that healthier people "get" nudging, it's unclear that folks with less healthy lifestyles will easily adapt to the intended motivations of lower co-pays.