Many employers and government and commercial insurers think high-deductible health plans (HDHPs) will curb health care spending because they compel workers to pay out of pocket for initial care, giving them “skin in the game.” But those plans aren’t the panacea many think they are, says LDI Senior Fellow Claudio Lucarelli.

HDHPs reduce spending at first but may not slow spending growth over time, said Lucarelli, Associate Professor of Health Care Management at the Wharton School. “If policymakers want to decrease the growth in health care spending, they’re going to have to look elsewhere.”

And spending growth is not all bad, Lucarelli adds. It’s a sign of ongoing medical innovations such as GLP-1 drugs, mRNA vaccines, and advanced imaging.

Those conclusions are based on a new study by Lucarelli, former LDI Executive Director Mark V. Pauly, former LDI Associate Fellow Molly Frean, and colleagues.

The study comes as health costs continue to rise and HDHPs are seen as a key solution. More than one-third of Americans with employer-based insurance have an HDHP. This means that in 2026, they pay at least $1,700 out of pocket, or about $3,400 for a family, before insurance kicks in. To help with deductibles and other costs, companies often pair HDHPs with the option to make pretax contributions to health savings accounts.

HDHPs are cited in discussions about controlling health care spending growth because spending drops—at least temporarily—after employees switch from low-deductible health plans (LDHPs), Lucarelli said. But the effect does not last.

HDHPs and Longer-Term Spending

The researchers asked whether HDHPs suppressed health care spending growth beyond the first year of higher deductibles. Their study analyzed claims data from 2015 through 2018 from the national insurer Elevance, covering more than 337,000 individuals. The data came from employer-provided plans, including self-insured companies, without claims from ACA marketplace insurers or Medicare and Medicaid. For the study, HDHPs were defined as plans with deductibles greater than $1,250 for individuals and $2,500 for families, following Internal Revenue Service regulations about health savings accounts.

The main analysis compared spending under high- and low-deductible plans for people who stayed with their coverage for four years or longer. Spending was calculated as total amounts paid by insurers and beneficiaries. The authors used methods that allowed them to directly attribute changes in spending growth to the type of health plan.

Spending by insurers and beneficiaries grew over the study period under both high- and low-deductible plans, although HDHP spending was about 20% lower than LDHP spending each year. Study results showed that spending for each plan member rose by about $670 on average each year of the study, regardless of health plan type.

People who choose HDHPs tend to be healthier and less likely to need costly care. To eliminate this potential bias, the authors separately analyzed claims from people who were required to switch from an LDHP to an HDHP because of changes in their employers’ benefit options.

The results confirmed that HDHPs did not change spending growth over the study period.

Not All Growth is Bad

The findings support the authors’ hypothesis that medical innovations, such as new cancer immunotherapies and cures for viral diseases such as hepatitis C, drive spending growth because people use them regardless of their health plan deductible. Constraining research and development isn’t an option because these innovations help us live longer, healthier lives, Lucarelli says.

What about federal efforts to control costs, such as negotiations between Medicare and drug manufacturers and benchmarking U.S. drug prices to other countries? Lucarelli sees these tools as using “the same policy levers” as HDHPs because, although they may decrease spending levels for existing drugs, they will not reduce spending growth in the long run without slowing medical innovation.

The data come from one insurer, and although using data from 2015 to 2018 avoids the atypical COVID-19 pandemic years, spending patterns today may differ with newer therapies and changing insurance markets. The study included only people with employer-based insurance, but all consumers presumably value medical innovations, so the results may apply broadly. The researchers will next study how insurance design affects spending growth trends over longer periods.

Insurers, employers, and consumers should expect health spending growth to continue, Lucarelli said, and should appreciate the better life that medical advances bring. “Health is the most valuable asset we have, so investing in it is definitely worth it.”

---

The study, “What Do Health Insurance Deductibles Do to Health Care Spending Growth?” was published on May 26, 2026 in International Journal of Health Economics and Management. Authors include Claudio Lucarelli, Molly Frean, Aliza S. Gordon, Lynn M. Hua, and Mark V. Pauly.

Author

---