High Deductible Health Plans are Dangerous to Your Health

By Jill Zorn |

Here is a good definition of health insurance: “coverage that provides for the payments of benefits as a result of sickness or injury.”  And here is another definition of the word insurance: “a means of guaranteeing protection or safety.”

The problem with high deductible health plans (HDHPs) is that they don’t provide ENOUGH coverage for most people and they certainly don’t guarantee protection from financial harm.  In reality, these plans are simply shifting financial risk away from insurance companies and onto individual patients, leaving people less protected than ever should they actually need to USE their coverage.

Who can afford the deductible?

Earlier in May, Noam Levey of the LA Times published an article on high deductible health plans entitled, “Health insurance deductibles soar, leaving Americans with unaffordable bills.”  The article refers to a Kaiser Family Foundation/LA Times survey that,  “…takes a special look at those in high deductible plans, … those with chronic health conditions, and those with lower incomes.” Two thirds of respondents in the highest deductible plans said if faced with an unexpected bill equal to the amount of their deductible, they could not pay it without going into debt (see figure 14 in the survey).  Over half of those in the highest deductible plans said they had personal savings less than the amount of their deductible (see figure 13).

Harmful to people with chronic health conditions

With the ever-increasing cost of care, people or their employers are choosing these plans because their premiums are lower than those of plans that offer better coverage.  But, while their premiums may be lower, people with these policies could end up paying much more should they get sick or injured.  And, if someone is living with a chronic illness, like Type 1 diabetes, asthma or cancer, or if someone is in their 50’s or 60’s, where the likelihood of needing to use medical care is higher, these plans are almost useless.

The same Kaiser Foundation/LA Times Survey showed that among those with high deductibles and chronic conditions, half of those in the highest deductible plans were not confident they could afford their usual medical costs and 64% were not confident they could afford a major illness (see figure 18).

The myth of promoting “shopping”

High deductible health plans were allegedly invented to keep people from over-utilizing unneeded health care services and to provide an incentive for people to “shop” for low cost (but supposedly high quality) care.  Research shows that most health care is not shoppable.  Patients don’t have easy access to price information – which varies depending on what your health plan has negotiated.  And they certainly don’t have access to quality information, so they can weigh different options based on both cost and quality.

HDHPs defer necessary care

Patients with high deductible health plans are forced to make medical judgements about whether care is needed, based on the condition of their pocket books.  The result is that people are cutting back on both necessary and unnecessary care; leaving illness undiagnosed and untreated for now, while leading to more expensive and dire health consequences later.  As one physician wrote in a recent CT Mirror op-ed, HDHPs interfere with the provider-patient relationship, causing some people to question an ordered test or treatment because they are worried about the cost.

“More worrisome is that patients with high deductible health plans are less likely to get the care they need. Research shows that patients with high deductible plans delay or forgo essential medical care because of the cost. Studies reveal that patients with high deductible plans do not return for important follow-up visits and skip free preventive services.”

So, what can be done about these health plans that only work if people are both healthy and wealthy? 

SB 902:  An Act Concerning High Deductible Health Plans

This bill starts to make a dent in some of the most egregious practices of HDHPs.  It proposes to:

  • Pro-rate the deductible for people who get coverage after the plan year has begun
  • Allow credit for deductible payments already made in one HDHP to be applied to a new HDHP if the person switches jobs and plans mid-year
  • Ensure credit is given toward the deductible whether payment is made in or out of network
  • Prohibit varying annual deductibles by family size

The Office of the Healthcare Advocate is a major sponsor of this bill.  Read Healthcare Advocate Ted Doolittle’s bill testimony HERE.

What you can do

Think about why insurers like selling HDHPs:  they make people and employers pay thousands of dollars in premiums for coverage they or their employees can’t afford to actually use to stay healthy or to seek care if they get sick.  Needless to say, insurance industry lobbyists are fighting hard against SB 902.

That is why your State Senator and State Representative need to hear from you.  Call them today and tell them why SB 902 is important to you and ask them to support this legislation.

Note: Don’t know how to be in touch with your legislators? Click HERE for all the info you need!