Prediction of healthcare costs on consumer direct health plan in the Brazilian context

TL;DR

This study simulates the use of Health Savings Accounts and catastrophic insurance for 10 million individuals in Brazil, showing HSAs can sustainably support private healthcare costs for the elderly without increasing inequalities.

Contribution

It introduces a novel Markov Chains approach to estimate healthcare expenditures and evaluates HSA effectiveness in the Brazilian healthcare context.

Findings

HSAs do not increase inequalities in healthcare access.

HSAs are a viable method for financing elderly healthcare.

Simulated data supports HSA sustainability in Brazil.

Abstract

The rise in healthcare costs has led to the adoption of cost-sharing devices in health plans. This article explores this discussion by simulating Health Savings Accounts (HSAs) to cover medical and hospital expenses, supported by catastrophic insurance. Simulating 10 million lives, we evaluate the utilization of catastrophic insurance and the balances of HSAs at the end of working life. To estimate annual expenditures, a Markov Chains approach - distinct from the usual ones - was used based on recent past expenditures, age range, and gender. The results suggest that HSAs do not create inequalities, offering a viable method to sustain private healthcare financing for the elderly.