Navigating the Fallout of HDHP Waiver Expiration
Telehealth After the HDHP Waiver Expiration: A New Era of Challenges
The start of 2025 marks a significant shift for millions of Americans who depend on telehealth. On December 31, 2024, the waivers allowing High-Deductible Health Plans (HDHPs) to cover telehealth services pre-deductible officially expired.
These waivers, introduced through the CARES Act in 2020 and extended by the Consolidated Appropriations Acts (CAA) of 2022 and 2023, allowed HDHP participants to access virtual care without first meeting their deductibles, preserving their eligibility for Health Savings Accounts (HSAs). Now, with the policy no longer in effect, patients and providers face the financial and operational realities of this change.
How We Got Here: The CARES Act and Beyond
The CARES Act introduced a temporary safe harbor in response to the COVID-19 pandemic, removing financial barriers to telehealth for HDHP enrollees. This provision allowed millions of Americans to access affordable virtual care while retaining the tax advantages of their HSAs.
Recognizing its impact, Congress extended the safe harbor through the CAAs of 2022 and 2023. However, no legislation has yet been passed to make the waivers permanent, leaving HDHP participants subject to the traditional rules requiring deductibles to be met before insurance coverage kicks in.
Immediate Impacts on Patients
1. Higher Out-of-Pocket Costs
Patients enrolled in HSA-compatible HDHPs now face full out-of-pocket costs for telehealth services until their deductibles are met. This shift is especially burdensome for families with high deductibles, which often range from $3,000 to $7,000.
Example: A patient needing frequent virtual consultations for a chronic condition may now pay $150–$300 per visit until their deductible is reached. Such costs could deter timely care.
2. Barriers to Access for Vulnerable Populations
Telehealth has been a lifeline for underserved groups, including rural residents, individuals with limited mobility, and those with chronic illnesses. Increased costs could disproportionately impact these populations, limiting their ability to seek care.
Data Insight: A 2022 JAMA Network Open study showed telehealth improved access for 20% of patients in underserved areas. These gains are now at risk of erosion.
3. Shifts in HSA Utilization
The expiration has forced many HSA participants to prioritize in-person visits over telehealth, negating the convenience of virtual care. This trend could delay care for patients who find in-person visits less accessible.
Impacts on Providers
1. Decline in Telehealth Utilization
Healthcare providers report an immediate drop in telehealth appointments as patients reconsider the cost-effectiveness of virtual care. This decline threatens the financial sustainability of telehealth programs established during the pandemic.
2. Operational Strain
Practices, particularly smaller ones, must adapt their billing and care delivery models to address shifting patient demand. For many, the underutilization of telehealth infrastructure represents a sunk cost that is difficult to recoup.
3. Increased Demand for In-Person Services
Healthcare systems are seeing a return to in-person visits, further straining resources and extending wait times. Overwhelmed clinics may face challenges in maintaining the quality and timeliness of care.
Broad Healthcare Implications
1. Disruption of Value-Based Care
Telehealth has been a cornerstone of value-based care, supporting preventive services and timely interventions. Increased patient costs could lead to deferred care, undermining preventive efforts and driving up long-term healthcare expenditures.
2. Worsening Health Inequities
The reintroduction of cost barriers exacerbates disparities in healthcare access. Patients with limited financial means are more likely to delay or avoid care, potentially leading to worse health outcomes and increased inequities.
Pathways Forward
1. Advocating for Legislative Action
Policymakers must consider reinstating a telehealth safe harbor for HDHPs. Proposals such as the Telehealth Extension and Evaluation Act offer viable solutions to restore affordable access to virtual care.
2. Employer Initiatives
Employers can mitigate the impact by offering direct subsidies for telehealth services, partnering with telehealth providers, or exploring alternative benefit structures that prioritize affordability.
3. Provider Innovations
Providers may adapt by implementing subscription-based telehealth models or offering sliding-scale pricing to maintain access for patients facing financial challenges.
What’s Next for Telehealth?
With the waivers expired, advocates and industry leaders are calling on Congress to act. Proposals like the Telehealth Extension and Evaluation Act aim to reinstate the safe harbor, but progress remains uncertain.
In the meantime, employers and healthcare providers are exploring ways to bridge the gap. Some employers are offering subsidies for telehealth visits, while providers are experimenting with subscription-based pricing models to make virtual care more accessible.
Conclusion
The expiration of HDHP telehealth waivers marks a pivotal moment in the evolution of U.S. healthcare. Patients face increased costs and reduced access, providers struggle with operational challenges, and the healthcare system risks losing the progress made in virtual care adoption.
To ensure telehealth remains a viable and accessible option, policymakers, employers, and healthcare providers must collaborate on innovative solutions. Restoring a telehealth safe harbor under HDHPs is an essential step toward maintaining affordable and equitable healthcare for all.