More and more employers are moving to consumer-driven health care plans, which equates to higher deductibles and more out-of-pocket costs. Likewise, many consumers who purchase coverage on their own are gravitating towards these high deductible plans (defined as those with a $1,500 or higher deductible for individuals and $3,000 or higher for families), often because it’s all they can afford.
The chart below shows the findings from a recent Kaiser Family Foundation survey which confirms that, while many consumers are voluntarily choosing these plans, they aren’t necessarily thrilled about it.
Kaiser Family Foundation findings of how non-group enrollees judge the value of high- and low-deductible health-care plans.
The chart compares the responses of those in high vs. low deductible health care plans when asked how they felt about their plans’ value. Only a combined 37{d044ab8acbff62f209a116f8142e303cb886f535b0fcf58cb82cde7cb327d3c9} of those in high-deductible plans thought they were getting a good or excellent value, compared with 68{d044ab8acbff62f209a116f8142e303cb886f535b0fcf58cb82cde7cb327d3c9} of those carrying low deductible options. In fact, 60{d044ab8acbff62f209a116f8142e303cb886f535b0fcf58cb82cde7cb327d3c9} of high-deductible respondents said the value of their plan was fair or even poor.
Those with high deductibles were much more likely (55{d044ab8acbff62f209a116f8142e303cb886f535b0fcf58cb82cde7cb327d3c9} vs. 22{d044ab8acbff62f209a116f8142e303cb886f535b0fcf58cb82cde7cb327d3c9}) to worry about receiving a high medical bill, with many indicating they’d have to borrow money or use a credit card if they were faced with a $1,500 medical bill. Fifteen percent of respondents admitted they wouldn’t be able to pay it at all.
With rising health care costs, insurers and employers often have no choice but to raise deductibles to keep premiums at bay. As a result, there’s an increasing need to thoroughly evaluate any and all cost-sharing measures and effectively communicate with employees about their coverages and options.
For more about this study and its findings, check out this Wall Street Journal blog.
Insurers and employers may feel that they have no recourse but to keep raising deductibles to constrain premium increases. Many people will feel a high-deductible plan is their best option, either because they presume they won’t need care or because they can’t afford a plan with a higher premium. But the survey found that choosing a plan with a very high deductible can feel like a Faustian bargain if deductibles bite when people do need care. Deductibles, like all forms of cost-sharing, help keep health-care use and costs down, but finding the right balance between appropriate and excessive cost-sharing has become a major challenge for employers, insurers, the government, and consumers.