High-deductible health plans on the rise

[eridani]

http://www.tennessean.com/article/20111227/NEWS07/312270017/High-deductible-health-plans-rise

Corporate employers, small businesses and nonprofit organizations are increasingly requiring their workers to spend between $1,200 and $5,000 before filing a health insurance claim.

Nearly three in four employers will offer at least one of these plans next year, according to a survey by the National Business Group on Health, a nonprofit association that represents large employers.

Helen Darling, its president, predicts that by 2016 the majority of all health plans will have high deductibles.

Comment by Don McCanne of PNHP: The National Business Group on Health (NBGH) is composed of the nation's largest employers, predominantly Fortune 500 companies. They provide health coverage for over 50 million workers, retirees and their families. When NBGH's president, Helen Darling, says that three years from now the majority of all plans will have high deductibles, you can bank on it.

Although this development is independent of the measures in the Affordable Care Act (ACA), it has greater consequences than any other feature of ACA, merely based on the number of people who will be impacted - not just the Fortune 500 company employees, but virtually everyone else as well.

Most workers and their families obtain their health care coverage through their employment. With large employers leading the way, high deductible plans will become the national standard. For median-income households, the deductible is large enough to create a financial hardship should a family member have significant health care needs. Thus, under-insurance is becoming the new norm, not only for employer-sponsored plans, but also for the low actuarial value plans to be offered through the state insurance exchanges.

The rationale usually given for high deductibles is to make patients more sensitive to the costs of health care so that they will use less of it. This has been shown not only to decrease the use of beneficial health care services, but it also potentially exposes people to financial hardship when they develop problems for which health care is absolutely essential.

So the question is, does this really save enough money to warrant these adverse consequences? Let's look at the RAND HIE and also the experiences of other nations.

The RAND Health Insurance Experiment demonstrated that health care use was reduced by 30 percent in patients with cost sharing as compared to first dollar coverage, supposedly without resulting in harm (though low-income people were harmed). But that study was limited to healthy workers and their young healthy families during a few healthy years of their lives. It does not apply to the relatively unhealthy 20 percent of people who use 80 percent of our health care dollars - care that is not influenced by deductibles. Reducing spending by 30 percent on healthy people who use very little care - perhaps an office visit or two - is not going to reduce our national health expenditures significantly.

Many other nations have first dollar coverage with no deductibles, yet spend far less than we do, and with no evidence of significant overuse of medical services. There are far more effective and much more patient-friendly methods of controlling spending than the use of deductibles and other cost sharing, as these nations have demonstrated.

The Affordable Care Act is not providing us the framework that would ensure affordable care for everyone. Trying to modify the Act to make it work better won't help because the financing infrastructure is so fundamentally flawed that legislative tweaking cannot repair it. Though getting rid of deductibles would be an improvement, it wouldn't reduce our high costs, but would merely shift them, making insurance premiums even less affordable.

For this new year, we really have our work cut out for us. The public at large needs to understand the irreparable flaws in the ACA model of reform. People need to know that we can control spending while making health care accessible and affordable for everyone. We can do this by enacting a far better way to finance health care - a single payer national health program: an improved Medicare for all.

My comment: Not only do the sickest 20% account for 80% of health care costs, 5% of the very sickest account for 50% of the costs. "More skin in the game" really means "Save money by bankrupting and killing the very sickest."

[SixthSense]

1. The sickest 20% do not consume 80% of spending

something like 45% of all medical spending these days goes into fraud and profiteering

if you've never seen a doctor poke his head for 3 seconds into each room of a hospital wing and then bill each and every patient...

or a nursing home where you can tell in 2 minutes from walking in that there's no way in hell the operation meets legal minimums in standard of care...

or a clinic with 5 doctors and 25 people working the insurance paperwork...

or a 70+ year old man with a Viagra prescription...

and so on and so forth

So much bullshit got wrapped into the package labeled "health care" that it's an open question how much actual health care, in dollar terms, is being delivered.

I personally have been totally priced out of the health care market. I can't afford insurance @ $15k+ year even though I am totally healthy. So I have to pay cash for the little I consume, and when I do I get ALL the bullshit in the system cost-shifted onto me. So basically I am in the position where I am my own DIY medical professional and if it gets really bad I'll be a charity case in the hospital, no doubt hounded afterwards by debt collectors and lawyers (who will get paid despite the fact that they'd never see a dime from me, ever).

Things keep going this way, a good portion of Americans will have to resort to the black market for minimum medical needs.

[eridani]

2. Your percentages make no sense whatsoever.

The percent of health care speading devoted to administration and profit is irrelevant to the percentage of health care used by the very sick as opposed to the healthy majority. Two separate issues.

Your experiences, though, are a perfect demonstration of what is wrong with our health care system. Please join the fight for Medicare for All.

[dembotoz]

3. so you can pay for insurance and still face bankruptcy if you get sick

bizzaro world health care

health insurance you can not afford to use

the old emphasis on wellness will be a thing of the past or only for the weathy.

[etherealtruth]

5. Exactly

I pay my healthcare premiums (employer sponsored), since our deductibles and co-pays are so high I can't afford healthcare. I pay the premiums because at (almost) 50 there is an significant chance i could need need healthcare for a catastrophic illness.

With a child in college and one soon to follow ... a $6,000 deductible might as well be $60,000

[unblock]

4. my deductible went up from $4000 last year to $5700 this year (!)

on top of over $4500 in annual premiums for a familty (spouse + 1 kid).