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Lisa Zamosky is a writer specializing in healthcare and a former executive who worked for years in the health insurance industry. (Courtesy photo)
As the cost of health insurance continues to rise and salaries continue to shrink (or disappear altogether), high-deductible insurance plans grow in popularity.
Why?
With high-deductible plans, monthly premiums are generally much lower than one would pay for a traditional health plan. They are often combined with health savings accounts, or HSAs, which allow consumers to save and accumulate money tax-free. These dollars can then be used to pay for premiums and other out-of-pocket medical costs at a savings.
The exchange you make for reduced monthly premiums with a high-deductible health plan, however, is that you’re responsible for paying upward of $5,000 or more for medical expenses before these plans kick in.
Behind the Scenes
Research studies on the impact of high-deductible plans on consumer behavior have shown that to cut down on costs, people tend to skip visits to the doctor and limit their use of medications, even for conditions like high blood pressure and cholesterol.
Most recently, the New York Times reported the results of a survey conducted by the investment firm Fidelity, which found that half of the employees who chose a high-deductible plan connected to an HSA skipped medical care for minor illnesses up to four times in the last year. The reason was simple: they were trying to avoid paying out-of-pocket for the medical services they needed.
The avoidance of medical care is particularly disconcerting when you add to the equation research that has shown that minor illnesses often become major ones when they aren’t dealt with early on. It seems that high-deductible health plans create a financial incentive to skip necessary medical care, which increases the risk of people becoming very sick (and requiring even more expensive medical care) down the line.
What you should know
There is a reality we all have to face: health insurance is becoming ever more expensive, which means that consumers are increasingly looking for ways to obtain insurance coverage without breaking the bank.
A recent study published in the journal Health Affairs showed that for people with employer-sponsored health insurance, out-of-pocket expenses grew by more than 33 percent between 2004 and 2007. The story is even worse for the 17 million Americans who get their coverage in the private insurance market.
While some form of health insurance reform will likely come out of Washington this year, I’m not so confident that it’s going to make health insurance any more affordable for many consumers.
What to do
If you’re considering buying one of these high-deductible plans, or any plan for that matter, make sure you do your homework. Online resources, such as www.vimo.com and www.ehealthinsurance.com help you shop and compare before buying.
With high-deductible plans, you get a lower price only in part because you have to spend more of your own money upfront before reaching your deductible. There can be other restrictions you need to watch out for as well.
Pay attention, for example, to fine print addressing lifetime coverage limitations, restrictions on the number of doctor visits allowed each year, limitations on coverage for hospital stays and prescription drugs. Even once you’ve reached your deductible, a high-deductible insurance plan can end up costing you thousands of dollars if you become sick.
Still, this kind of coverage may very well be the only insurance you can afford these days, and some insurance is probably better than none at all.
Take Action
It’s important that you don’t put off going to the doctor, particularly if you have a health condition and/or take medications. Instead, look for ways to save money on the medical care you need to limit your out-of-pocket costs and avoid exacerbating any minor conditions that crop up.
Here are a few tips for accessing medical care when money is tight and you’re nowhere near meeting your deductible:
- Free health screenings and vaccinations are available at clinics all around the country. Check the CDC’s website for one near you.
- Check out retail clinics, such as MinuteClinic, TakeCare and MediMinute. These can be found in pharmacies and Wal-Mart stores all across the country. Their prices are reasonable and studies have found the care to be on par with private doctors.
- Negotiate with your doctor around the cost of office visits and shop around for labs that will give you a break on tests. Resources such as Blood Works USA and MyMedLab are offering consumers a way to get necessary tests for less.
- Ask for sample medications, or talk with your doctor about generics, which are much cheaper than brand name drugs.
Best of luck!
If you have a healthcare question you’d like help answering, please send your query to Lisa at lisa@writtenarts.com.
Lisa Zamosky is a writer specializing in healthcare and a former executive who worked for years in the health insurance industry. Visit her online at writtenarts.com.
E-mail Lisa at lisa@writtenarts.com.
Follow Lisa on Twitter: twitter.com/lzam.
Tags: Fidelity, Health Affairs, health insurance, health savings account, high-deductible insurance plans, new york times, SDNN
