Continuation of Research on Consumer Directed Health Plans: HSA Simulation Model Refinement . A. Old Caveats


While we have developed an improved model for this analysis, several of the old caveats remain from the original study.  The first is that we do not observe the uninsured in our plan choice estimation.  Thus we have to add intercept terms in our prediction equation to calibrate the level of uninsured to match that reported in the market for both the individual and ESI populations. This is a caveat that is unlikely to change until the MEPS survey is updated to a point where HDHP plan choices are available.  Even then, HDHP respondents would need to be over- sampled to get adequate power for the plan design effects.

The second caveat is that both the HDHP and MEPS data are several years old and need to be inflation-adjusted for this analysis.  However, we feel more confident making these adjustments because the plan designs in our analysis are largely the same as three years ago when the plan choices were observed and our premium estimates are based on claim expenditures with a medical care inflation rate applied.  The MEPS data are the oldest component of the analysis, but linked insurance component and household interview survey data have not been made available beyond 2001.

The third caveat is that the estimated individuals enrolled in plans from the simulations are actually summed probabilities of a person's enrollment in a plan.  For example, we do not predict that 100 actual people will join a HDHP.  Instead, we predict that 1,000 people have (on average) a 10% probability of joining an HDHP (which sums to 100).  This is what a plan choice model enables us to do.  It also provides a platform for changes in policy to be predicted, but not to the point of saying that a person will absolutely choose a particular health plan.

A final caveat is that we still do not observe actual HDHP plan choices with an HSA.  Instead, we use the results of a low option Health Reimbursement Account (HRA) design that later became the standard benefit design template for an HSA.  We are obtaining new plan choice data that will include HDHP choices with HSAs offered by a large employer for new model enhancement in the future.

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