• The long view of high deductible plans

    There’s another message of the Health Affairs paper Aaron wrote about earlier. It comes from asking this question: putting aside whether you think high deductible health plans (HDHPs) are good or bad, do you think they’re a sustainable solution?

    Look again at the graph Aaron presented:

    How do you think people who report a financial burden feel about their health plan? I think it is not a stretch that they are vastly more likely to feel that it is letting them down. In other words, even if HDHPs are (or could be, or will be) doing a tremendously good job of keeping health care spending and premiums down, even if they don’t do so with any sacrifice in health outcomes (all debatable points), people may come to hate them.

    Is “hate” too strong a word? No, it is not. Ask an average American how she felt about her health plan in circa 1997 and I think “hate” (or similar) would enter the conversation. Back then, managed care was “solving” our health spending problems. It wasn’t the type of solution Americans were willing to tolerate. So, gone are the days of very tight networks and utilization controls. (They still exist. They’re just not as onerous.)

    I don’t hope that HDHPs experience the same fate. I have no big stake in whether they work or not. My point is that when you look at something like the figure above it is hard to imagine Americans are going to embrace them long term.

    For a time HDHPs may “work” (or seem to). But keep your helmet and pads on. The backlash may be strong.

    • Speaking just for myself, I love my high deductible BCBS health plan. The insurance plans that I hate are those that make you think you are covered but then make you pay for this or that. I consider it a benefit of my high deductible insurance plan that I do not have to fight the insurance company over little things, I just pay the bill. I have heard horror stories from people with low deductible insurance plans.

      I am unusual in this day in that I always keep a about $30,000 in cash for emergencies.

    • I have a co-worker who is negotiating the medical expenses for his next child with a local hospital. His first child was borne at this hospital and was charged $15,000. The contract he is getting ready to sign is for $2,400. The includes all pre-natal exams, ultrasound, epidermals, and normal hospital delivery services. If a c section is required it will cost an additional $2,900. All additional expenses not covered by the contract will be charged at 85% discount.The major stipulations by the hospital is that he not file a claim with a health insurance plan and that he pay cash up front. He has a high deductible health care plan.

      If there is any hate in him it is not directed at his insurance company but at the health profession. What is the real fair market price for a baby being borne? This angst is tempered by the fact he knows he is getting a much better deal this time but he had to fight with the hospital to get the plan.

      The big question is what will the doctors and hospitals do if they are badgered into offering competitive quotes and bundled plans to high deductible patients?

      • @Bill Huber – Just so it is clear, I’m not predicting hate now. It’s later when people are paying higher and higher deductibles and still premiums are going up. In other words, there may be a one-time shift (though it could take several years), but then a resumption in rising premiums. I do not expect HDHPs to be the answer long-term. That does not by itself mean they should not be an option. I fully expect they will grow in popularity for some time. (I even considered one this year, but it was too hard to evaluate the whole package so I stuck with the status quo, for now.)

    • @Bill- On an occasional basis, docs negotiate lower fees. What you describe is a hospital bundling a package that is not likely to make people happy if done often. i would be willing to bet that if more people come seeking the same deal, it will cost more.