High-Deductible Health Insurance Worsens Racial Wealth Disparities, New Study Finds

A new study published in Health Affairs—“High-Deductible Health Insurance May Exacerbate Racial And Ethnic Wealth Disparities” by Naomi Zewde, Sergio Rivera Rodriguez, and Sherry A. Glied — exposes how high-deductible health plans (HDHPs) compound racial and ethnic wealth disparities in America, effectively making health care less available and affordable for Black and Hispanic families.

Even when I still worked in the industry, research showed that the burdens of out-of-pocket medical expenses — deductibles, copayments and coinsurance — fall hardest on low-income households, especially among Black and Hispanic families. Nearly 20 years ago, I recall sitting in a leadership meeting at Cigna. The company’s newest VP, who had made a name for himself in the so-called “consumerism” movement, tried to convince us that moving more Americans into high-deductible plans would work in the everybody’s interests. We could easily see how they would benefit Cigna and other insurance companies, but we couldn’t figure out how patients would benefit. We peppered him with questions, and his answers were not landing. He eventually said, "Look, you're just going to have to drink the Kool-Aid." Most of us did and most are still drinking it. I remained a skeptic. The Health Affairs study gives us a deep glimpse into what all of us in that  meeting knew would happen even if we weren’t willing to acknowledge it: HDHPs would widen the wealth gap and exacerbate health inequities in this country. 

The authors examined data on privately insured families from 2011 to 2018 and found stark wealth disparities between racial and ethnic groups, even when families had similar incomes. White families with private insurance, on average, had more financial assets across all income levels than their Black and Hispanic counterparts. In the lowest income bracket, White families had over 350% more financial assets than Black families.

In this way, high deductible plans — which require enrollees to shoulder significant costs upfront before insurance coverage kicks in — aren’t just financially burdensome. They reinforce a system in which financial stability and access to necessary care are out of reach for many Black and Hispanic families. The median financial assets for low-income Black and Hispanic families enrolled in HDHPs were around $2,200 and $2,000, respectively — far below the typical deductible for family coverage, which averages about $5,000. For these families, covering medical expenses under such a HDHP means draining any modest savings, leaving them economically vulnerable.

The Roots of HDHPs and Their Disparate Impact

HDHPs emerged in the 2000s, incentivized by the Medicare Modernization Act, which introduced tax-favored Health Savings Accounts (HSAs). These accounts, available only to those in HDHPs, were initially intended to encourage consumers to spend more thoughtfully on their health care. However, HSAs disproportionately favor higher-income, wealthier, and largely White households that are more likely to have financial assets to set aside in any kind of savings account. Lower-income Black and Hispanic families, on the other hand, are left to manage HDHPs without the financial buffer an HSA provides wealthier families, amplifying the financial precarity they face.

The researchers make it clear that HDHPs have created a two-tier system within the privately insured population. Wealthier White families, many already advantaged by generational wealth and financial security, have the resources to manage high deductibles and to benefit from HSAs. Meanwhile, Black and Hispanic families with HDHPs face the dual burden of health costs and limited wealth, translating into significant disparities in health care access.

The Role of Wealth (Not Just Income) in Health Inequities

The study’s findings underscore a critical, often overlooked dimension of health care inequality: wealth. Historically rooted racial wealth gaps persist because wealth is not merely a function of current income but rather of generational accumulation—or lack thereof. The gap between White families and Black or Hispanic families reflects hundreds of years of exclusionary policies, from redlining to disparities in educational and economic opportunities. 

HDHPs exacerbate this issue by turning health care affordability into a question of wealth. When American families with fewer monetary reserves have to tap into already limited savings to pay for medical care under HDHPs, they are left even more financially vulnerable. The result? Health insurance that was supposed to protect families instead deepens racial inequities and make many families even poorer.

Policy Implications: Reducing Wealth-Based Barriers to Health Care

The study’s findings highlight a pathway for policymakers aiming to create a more equitable health care system. Potential reforms could include capping deductibles in HDHPs or limiting the tax benefits of HSAs to reduce the wealth advantage they provide to affluent families. Policymakers could also explore expanding programs that reduce out-of-pocket costs for low- and moderate-income people. Such measures could help prevent wealth from becoming a barrier to accessing necessary medical care.

The report from Health Affairs is a stark reminder that health care policies do not exist in a vacuum. High-deductible health plans may be marketed by insurers as an effective cost-sharing solution, but they come at a significant cost for the economic stability and health of American families. Addressing these issues is a matter of urgency, as our health care system cannot truly be equitable if access to care depends on the financial assets a family can draw on in times of need.

This study is a call to action for policymakers to reconsider how our insurance system disproportionately harms families of color. The path forward requires dismantling policies that deepen inequality and moving toward a health care model that truly serves all.