A person balancing on a high wire representing a deductible, with healthcare symbols

Decoding Healthcare Costs: Do High Deductibles Really Make a Difference?

Theo Raines in Health & Wellness November 2025 • 4 min read.

"Uncover the truth about how high deductible health plans impact healthcare utilization, and whether they truly lead to cost savings."

In an era where healthcare costs are constantly on the rise, high-deductible health plans (HDHPs) have emerged as a popular strategy to control spending. The fundamental idea is simple: by increasing the amount individuals pay out-of-pocket before insurance kicks in, they become more conscious of healthcare consumption, theoretically leading to reduced utilization and lower overall costs.

However, the effectiveness of HDHPs is a complex and hotly debated topic. While numerous studies suggest that higher deductibles do, in fact, reduce healthcare utilization, questions remain about the long-term impact and whether these plans simply shift costs onto individuals, potentially delaying necessary care and leading to more severe (and expensive) health issues down the line.

This article delves into the findings of a compelling study that examines the real-world effects of HDHPs, providing insights into whether these plans truly make a difference in healthcare utilization and expenditure. By analyzing data from Switzerland, where individuals have the freedom to choose their deductible levels, the study sheds light on the nuances of HDHPs and their implications for both individuals and the healthcare system.

Do High Deductibles Actually Change Health Behavior?

A person balancing on a high wire representing a deductible, with healthcare symbols

The study, conducted by Stefan Pichler and Jan Ruffner at the KOF Swiss Economic Institute, tackles the question of whether high deductibles genuinely alter healthcare utilization patterns or merely attract a specific type of individual. The researchers compared two HDHPs in Switzerland: one with a deductible of 1,500 CHF (approximately $1,500 USD) and another with a higher deductible of 2,500 CHF.

Switzerland provides a unique setting for this research because its healthcare system allows individuals to freely choose their deductible level, ranging from a minimum of 300 CHF to a maximum of 2,500 CHF. This freedom of choice creates a diverse landscape of healthcare consumers, making it possible to analyze the impact of different deductible levels on utilization.

Selection vs. Moral Hazard: The researchers aimed to distinguish between selection effects (healthier individuals choosing higher deductibles) and moral hazard effects (changes in behavior due to the deductible).
Regional Variations: They used regional variations in premiums as an instrument to isolate the causal effect of the deductible on healthcare utilization.
Policy Change: The study also leveraged a policy change in 2005 that introduced the 2,500 CHF deductible for the first time, creating a natural experiment to observe changes in behavior.

The findings revealed that selection plays a significant role. People who chose the higher deductible were already different, with lower expected health care costs. However, the results also indicated minimal behavioral change: higher deductibles did not necessarily lead to a decrease in overall healthcare utilization. For men, healthcare expenditures were higher with the higher deductible. There were no differences for women.

Key Takeaways: Rethinking High Deductible Health Plans

This study underscores the complexities of high-deductible health plans. While they may seem like a straightforward solution to rising healthcare costs, the reality is far more nuanced. The findings suggest that HDHPs primarily attract individuals who are already healthier and more cost-conscious, raising questions about their effectiveness in changing the behavior of those who need healthcare the most. It also raises concerns that, for some demographics, the higher deductible might create an incentive to avoid or delay treatment, leading to higher costs later.

About this Article -

This article was crafted using a human-AI hybrid and collaborative approach. AI assisted our team with initial drafting, research insights, identifying key questions, and image generation. Our human editors guided topic selection, defined the angle, structured the content, ensured factual accuracy and relevance, refined the tone, and conducted thorough editing to deliver helpful, high-quality information.See our About page for more information.

This article is based on research published under:

DOI-LINK: 10.2139/ssrn.2745780, Alternate LINK

Title: Does It Really Make A Difference? Health Care Utilization With Two High Deductible Health Care Plans

Journal: SSRN Electronic Journal

Publisher: Elsevier BV

Authors: Stefan Pichler, Jan Ruffner

Published: 2016-01-01

Everything You Need To Know

What is the main idea behind high-deductible health plans (HDHPs), and are they proving to be effective?

High-deductible health plans (HDHPs) aim to reduce healthcare spending by increasing individuals' out-of-pocket costs, theoretically making them more conscious of healthcare consumption. The idea is that by paying more upfront, individuals will use healthcare services less frequently, leading to lower overall costs. However, their effectiveness is debated, and it's not clear if they truly curb costs or simply shift the financial burden onto individuals.

How did the study by Stefan Pichler and Jan Ruffner examine the effects of high-deductible health plans (HDHPs) in Switzerland?

The study conducted by Stefan Pichler and Jan Ruffner compared two high-deductible health plans (HDHPs) in Switzerland, specifically those with deductibles of 1,500 CHF and 2,500 CHF. Switzerland's healthcare system allows individuals to choose their deductible level freely, making it a unique setting to study the impact of different deductibles on healthcare utilization. The study looked at whether individuals selecting higher deductibles were already healthier or if the higher deductibles influenced their behavior.

In the context of the study, what is the difference between 'selection effects' and 'moral hazard effects,' and how did the researchers try to distinguish between them?

The researchers distinguished between 'selection effects' and 'moral hazard effects'. Selection effects refer to the idea that healthier individuals are more likely to choose higher deductibles because they anticipate lower healthcare needs. Moral hazard effects, on the other hand, refer to changes in healthcare behavior caused by the deductible itself; for example, people with high deductibles might avoid or delay seeking medical care to save money. The study used regional variations in premiums and a policy change in 2005 to isolate the causal effect of the deductible on healthcare utilization.

What did the study reveal about the impact of high deductibles on healthcare utilization and costs for men and women in Switzerland?

The study's findings suggest that selection plays a significant role, meaning that individuals who chose the higher deductible of 2,500 CHF were already different from those with the lower deductible of 1,500 CHF – they generally had lower expected healthcare costs. Interestingly, the results indicated minimal behavioral change due to the higher deductible; healthcare expenditures were actually higher for men with the higher deductible. There were no differences for women, suggesting that high-deductible health plans may not necessarily lead to a decrease in overall healthcare utilization as intended.

What are the broader implications of this study regarding the effectiveness and potential drawbacks of high-deductible health plans (HDHPs) in managing healthcare costs?

The study underscores the complexities of high-deductible health plans (HDHPs) and raises concerns about their effectiveness in changing the behavior of those who need healthcare the most. The fact that individuals with higher deductibles were already healthier suggests that HDHPs may primarily attract cost-conscious individuals rather than effectively altering behavior. The higher expenses for men might create an incentive to avoid or delay treatment, potentially leading to higher costs later. Further research is needed to fully understand the long-term implications and ensure that HDHPs do not disproportionately burden vulnerable populations or deter necessary care.