High deductible health insurance is bankrupting Americans

Two decades ago, high deductible health plans barely existed. Today, more than half of the U.S. workforce is on one, which are plans with deductibles greater than $1300 per individual or $2,600 for a family.

It’s a growing, undiscussed problem for public health. Most doctors have had patients refuse treatment due to out-of-pocket costs caused by their high deductible health plan. All the while medical debt continues to grow, an issue that impacts more than 50 percent of Americans.

Study after study has proven that high deductible health plans (which lead to higher out-of-pocket costs) can be detrimental to the financial well-being of people, especially those with chronic health issues such as diabetes and cardiovascular disease.

And doctors know this. A little secret, not well-publicized, is that the majority of doctors (me included) do not choose high deductible health plans even if it saves us thousands of dollars.

So what can we do for patients?

Health insurance isn’t like car insurance.

A typical American on a commercial health plan will select a health insurance plan for 2022 and strive to never, ever benefit from it.

They and their employer pay for it (grudgingly, and often pay a lot), but the goal is to treat it like car insurance — hope that you and your family will never have to make a claim.

This may be fine when it comes to driving carefully. But when it comes to health, sometimes illnesses or injuries impose themselves, regardless of precautions – and it can be stressful and financially devastating.

As health care costs continue to rise, the “car insurance” approach is commonly taken: to keep health insurance payments down, the one with the lowest premiums (i.e., the high-deductible option) is chosen.

The hope is that no huge medical issue occurs. Still, small health care bills often add up annually, costing a lot out of pocket before the benefit kicks in. That “go for the cheapest premium plan offered” approach isn’t cheap at all.

Where did this idea come from?

Originally, insurance companies used high-deductible policies as a partnership tool, to encourage patients to look for lower prices when medical care is needed, saving money for both the patient and insurance provider.

This type of incentive would likely make sense in an industry or market where consumers price shop. But when’s the last time you heard anyone shop around for the best price of their procedure or surgery?

There are a lot of reasons it’s a waste of time to do price comparison shopping in health care. The biggest, glaring problem is that billing is complex, perhaps not maliciously but certainly imprudently. Add to that what patients don’t know: different rates negotiated between insurance companies and physicians for everything from office visits to scans to surgeries.

So, if patients can’t shop for the best price for their procedures, choosing a high-deductible plan with a lower premium cost seems the safest bet. Too often, the apparent cost savings in terms of premiums are not savings at all, swapped for high costs for everything else — from office visits to medicine to procedure costs.

What can we do?

Regulators should push health savings accounts (HSA) and businesses should offer them. While HSAs are growing, they are still only available to 30 percent of workers — more likely for larger companies than smaller ones. This, of course, is a way to help pay for extra medical costs almost always incurred under a high deductible health plan.

Perhaps a better option is to require all health insurance plans come with free primary care office visits. That can encourage patients to seek care earlier at lower costs (especially when compared to hospital emergency rooms or urgent care facilities, sites of choice if patients wait). One compelling example of this is when plans build in access to direct primary care.

In addition, we should advocate for price transparency at all levels and guide patients better on the “total cost” of their health care on an annual basis and not just the monthly premium cost.

High deductible health plans are not going away, but we can guide our community better to make costs transparent for better decision making.

Ben Aiken is a family physician.