EBRI Issue Brief

The Impact of Health Status and Use of Health Care Services on Disenrollment From HSA-Eligible Health Plans

Nov 12, 2018 25  pages


This study examines whether disenrollment from health savings account (HSA)-eligible health plans is associated with risk selection, such that once enrolled in an HSA-eligible health plan, less-healthy enrollees are more likely to disenroll from the health plan than healthier enrollees.  Such a phenomenon contributes to adverse selection and death spirals.  The paper focuses on the presence of health conditions and use of health care services as key determinants of disenrollment. 

Key findings:

  • Overall, 5 percent of HSA-eligible health plan enrollees in 2013 and 2014 switched to a different type of health plan in 2014 and 2015.
  • Among those disenrolling from an HSA-eligible health plan in 2014, 6 percent were enrolled in an HMO or EPO, and 94 percent were enrolled in a PPO or POS plan.
  • There is evidence that individuals who disenrolled from HSA-eligible health plans were more likely to have certain health conditions than those who remained enrolled in the HSA-eligible health plan.
    • Among individuals with no health conditions, 4.2 percent disenrolled from the HSA-eligible health plan.
    • Five percent of individuals with dyslipidemia disenrolled, along with 5.3 percent among those with hypertension or depression, 5.6 percent among those with diabetes, and 6.1 percent among individuals with schizophrenia/bipolar disorder.
  • Individuals with multiple conditions were even more likely to disenroll.
    • Disenrollment was 7.1 percent among those with a combination of hypertension, dyslipidemia, and diabetes.When depression is added to those conditions, disenrollment jumps to 8.2 percent.Among individuals with those conditions and others, disenrollment was 13.4 percent.
  • Individuals with claims related to childbirth were twice as likely as those with no health conditions to disenroll from HSA-eligible health plans.They were predicted to disenroll at a rate of 8.4 percent.
  • Individuals with ulcerative colitis and those with metastatic cancer were more likely than those with no conditions to disenroll.Otherwise, there was no statistically significant difference in disenrollment rates between individuals with rare and costly chronic conditions and those with no conditions.However, newly diagnosed individuals with rheumatoid arthritis or multiple sclerosis were more likely to disenroll from the HSA-eligible health plans as compared to individuals with no conditions.Predicted disenrollment rates were 6.2 percent for individuals with rheumatoid arthritis and 7.3 percent for those with multiple sclerosis.
  • Use of health care services was a statistically significant predictor of disenrollment from HSA-eligible health plans.However, the magnitude of the impact was quite small.For instance, 4.2 percent of individuals who used no health care disenrolled from HSA-eligible health plans, whereas 4.4 percent of those at median use disenrolled, and 5.2 percent of those at the 90th percentile of use disenrolled.
Disenrollment from HSA-eligible health plans, which includes a disproportionate number of individuals with health conditions, increases employer spending on health coverage by 2.5 to 3.2 percent.