What Does a Modest Deductible Do: The Impact of Higher Deductibles on Health Care Utilization in a Stable Insurance Program

As healthcare costs rise, many insurance programs have adopted higher deductibles to control spending. Prior research has found strong utilization responses to deductible increases, including reductions in valuable care and free preventive services. Recent evidence on these impacts of cost-sharing comes from settings where large deductible increases coincide with other changes to the health insurance system, including the implementation of formal high-deductible health plans (HDHPs). What happens if deductibles increase more moderately within an otherwise stable health insurance program? Are the impacts proportional to those found in prior studies, or are they smaller due to a lack of salience? This study examines the impact of an involuntary deductible increase in a large group health insurance program for public workers, in which deductibles rose from $0 to $250 for individuals and to $500 for families in one year without other major changes. Using individual longitudinal claims data, this study examines both short- and long-term utilization effects. Preliminary findings suggest that the deductible increase reduced utilization even more than anticipated based on prior elasticity estimates. If these findings hold upon further analysis, including leveraging difference-in-differences approaches, they will suggest that even modest deductible changes trigger sizable utilization responses rather than being non-salient.