Deductibles in Health Insurance, Beneficial or Detrimental: A Review Article

Abstract

Background: One of the ways for cost-sharing in health system that has been taken into consideration in recent years in some developed countries is paying deductibles. In case of using deductibles, the insured people more carefully and accurately will use health care services, and potentially many unnecessary costs will be avoided. Methods: To investigate the evidence of deductibles in health systems across the world, a literature review was conducted by searching the materials published in databases including ISI web of science, PubMed, Scopus and also Google scholar search engine from 2000 to 2017. Besides the related websites including WHO and the World Bank were searched. Inclusion criteria were studies carried out only in health insurance, English language, and the year of the study. Results: The most important positive impacts of deductibles were decrease in utilization of different services, high profitability for the young and healthy people, lower health benefit claims by the insured people, and increase in financial profitability of health insurance organization. Besides, the most negative impacts increase in out of pocket burdens and also higher hospitalization over time. Conclusion: Deductible plans have their own advantages and disadvantages for the insured and insurance organizations in terms of financial dimensions as well as utilization of health services, and explicitly none of these plans can be flawless. Given the increasing costs of health systems and the potential moral hazard of insured persons, it seems these systems sooner or later should inevitably move towards new cost-sharing plans, including deductibles.

A systematic review of strategies used for controlling consumer moral hazard in health systems

“…Demand side cost sharing is a financial tool [ 25 ] and a kind of out-of-pocket payment [ 26 ] that is used to decrease the demand for health services or improve the utility of useful services [ 27 ], these strategies provide incentives to reduce unnecessary demands by paying part of the service cost by consumers [ 11 ]. Deductibles (The amount of health costs that a person must pay before the insurance begins to pay), copayment (paying a fixed amount of the cost of each health service unit), coinsurance (paying a percentage of the cost of each health service unit) [ 28 ], and capping (applying a cap on out-of-pocket payments or insurance claims) are different forms of cost sharing [ 15 ] that their design methods are diverse in insurance systems [ 29 ]. Cost sharing is often used in countries with social health insurance systems [ 30 ].…”

“…[ 5 , 6 , 9 , 10 , 13 , 15 , 18 – 20 , 22 – 25 , 27 – 33 , 35 – 49 , 51 – 57 , 59 – 67 , 70 – 73 , 78 ]…”

“…The outcomes analyzed in the included studies are other points of debate in this review. The majority of the outcomes analyzed included demand and utilization of health services [ 5 , 15 , 18 – 24 , 30 , 33 , 37 – 40 , 43 – 45 , 47 – 51 , 55 , 56 , 58 , 60 , 62 – 65 , 68 – 71 , 75 , 84 , 86 ] and health services costs and expenditures, optimality and efficiency of strategies [ 5 , 15 , 30 – 32 , 36 , 37 , 39 , 41 – 44 , 53 , 54 , 57 , 59 , 68 , 70 , 73 – 76 , 83 , 85 , 87 , 94 ]. Limited studies have addressed other important aspects such as access to low-income people [ 49 , 60 , 68 ], reduction in the consumption of both essential (such as preventive and diagnostic services) and non-essential services [ 24 , 44 , 58 ], and people’s attitudes and acceptance [ 25 , 34 , 52 , 67 ].…”

“…The results of the study showed that "demand side cost sharing" or "consumer cost sharing" were the main strategies used for controlling consumer moral hazard as addressed by 56 studies [5,6,9,10,13,15,[18][19][20][21][22][23][24][25].…”

“…Moral hazard is known as one of the main causes of market failure [ 14 ] that has many adverse consequences, such as the impact on demand elasticity, reduction of welfare, inefficiency in using resources, reduction in technical and allocation efficiency, reduction of benefits of risk pooling, and price increase [ 11 , 15 ]. Moral hazard, as a concern in the health insurance market, requires the application of appropriate policies and interventions to be controlled.…”