Higher deductibles won’t be popular

In recent weeks the commentariat has turned to the high deductibles consumers may face in exchange plans. Jon Cohn’s recent round up covers the bases and today’s column by Uwe Reinhardt is similarly themed.

Over two years ago, I worried that consumers’ distaste for high out-of-pocket costs at the point of care may be the undoing of the consumer-directed health plan paradigm, of which high deductible plans are one component. The basic idea still applies today, as it did in the era of managed care: consumers and providers really hate health care cost control when it means getting less or paying more out-of-pocket.

In terms of cost control, managed care worked. Maybe it worked too well, fueling the fire that consumed it. Will the consumer-directed paradigm suffer the same fate? The history of health care cost control is that nothing works, or not for long anyway. The optics of high deductible health plans won’t be aided by the possibility that they may lead to increased rates of premium growth. Don’t be surprised if ratcheting up deductibles which, in turn, leads to lower health care utilization and provider revenue, succeeds to the point of failure too.

Health care cost control is hard and the history of failure is humbling.


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