The Effect of High-Deductible Health Plans on the Utilization of Mental Healthcare

Abstract

The goal of this paper is to evaluate the effect of high-deductible health plans (HDHPs) on the utilization of and financial barriers to mental healthcare compared to other forms of private insurance. Due to the rise in popularity of high-deductible health plans, and the increase in public awareness and focus on mental illness, the cross-section of insurance and mental health poses an interesting question in evaluating how insurance choices can affect the use of important forms of health services like mental healthcare (Bundorf, 2012; American Psychological Association, 2019; Keck School of Medicine, n.d.). The analysis conducted within this paper can be broken up into three main sections, all using linear probability models. The first section seeks to make a distinction in utilization of and financial barriers to mental healthcare between private, employer-sponsored HDHPs and other forms of private, employer-sponsored health insurance plans. The results of this first section found individuals with HDHPs were more likely to utilize and have financial barriers to mental healthcare at least once in the last year compared to individuals with other forms of private insurance. Within this section, further analysis specifically compares individuals with HDHPs and health maintenance organization (HMO) plans along with comparing individuals with HDHPs and preferred provider organization (PPO) plans. The analysis finds similar results, except for the lack of a statistically significant difference in utilization between individuals with HDHPs and PPOs. The second section evaluates the significance of pairing a HDHP with a health savings accounts (HSA) on the utilization of and financial barriers to mental healthcare. The results suggest that HSAs helped increase utilization and decrease financial barriers to mental healthcare. The final section followed the methodology of the first section, but with a focus on individuals with moderate to severe psychological distress. This section found that while type of private insurance plan did not affect utilization of mental health services, individuals with were more likely to face a financial barrier preventing care. Overall, the results of this paper shed light on how high deductibles appear to distort the utilization of mental health services by creating financial barriers to receiving care. Additionally, the results of this paper stress the importance of pairing a high-deductible health plan with a health savings account in order to reduce these possible financial barriers.