According to the National Center for Health Statistics, approximately 40% of adults with employer-based coverage were in high-deductible health plans in 2016. HDHPs are gaining traction amongst adults because they offer lower premiums and help people become more conscious about their medical expenses.

HDHP policies tend to range from $1,000 to $5,000, although there are plans with an even higher deductible. Once you have agreed to the deductible amount, you must pay it before your health insurance kicks in. For example, with a plan that has a $2,000 deductible, you have to pay that amount before your plan starts covering treatment.

Why Do So Many People Choose HDHPs?

There are some advantages. Otherwise, no one would choose such a plan! First, you pay lower monthly premiums. You also receive an element of protection in the event of an extremely expensive health emergency. It is a good plan for healthy individuals as long as they set aside the deductible amount each year.

HDHPs are becoming more popular as health costs continue to spiral upward. According to the Kaiser Health Foundation, over 50% of adults with health plans from their employers have a deductible of at least $1,000 (a slightly different figure from that espoused by the National Center for Health Statistics). Furthermore, this figure is a massive increase in just ten years; 10% of adults with an HDHP in 2006 had a deductible of $1,000+.

It is common for annual deductibles to cost thousands of dollars. For example, covered California Bronze plans offer the lowest available premium but carry an annual deductible of $6,300 for an individual and $12,600 on a family plan.

A Not-so-hidden Problem

While HDHPs are a good idea, in theory, the reality is that an increasing number of Americans are struggling to afford the high deductible, as unexpected injury or illness cause debt to mount. The Kaiser Family Foundation performed a survey on the cost of health care, and the results are troubling:

• 43% of Americans struggle to afford their deductible
• 29% of Americans have problems paying their medical bills
• 73% of these individuals cut back on expenditure on groceries, clothing, and basic household items
• 27% of Americans admitted to postponing or skipping health care they needed due to the high cost
• 23% did not pursue a medical treatment they needed for the same reason
• 21% admitted that they did not fill a medical prescription because they could not afford it.

Case Studies

Although the above statistics give you an idea of what is happening, perhaps a couple of real-life stories will help paint a better picture. Cammi Chase was delighted when she found a new Health Savings Account (HSA) plan with a $5,000 deductible. It reduced her family’s monthly premium from $800 a month to $240.

However, when she had an unexpected illness, the reality of the situation hit hard as she discovered how little her plan covered. While HDHPs and HSAs are appealing due to their low monthly premiums, they don’t take into account costs such as copayments and coinsurance. These out-of-pocket expenses quickly add up, and even insured individuals can end up in debt due to high medical costs.

Chase received a diagnosis of Lyme Disease, and she discovered that her plan did not cover doctor’s visits, lab work, and monthly tests, among other things. Her monthly doctor’s visit cost $165, for example. While she found a plan that covered more of her bills with a $325 monthly premium, Chase knows her family can’t afford the cost of the plan to increase.

Tina Heck earns $68,000 a year from her job, and her HDHP required her to pay a $5,000 deductible before her insurance kicked in. One day, an innocuous incident resulted in a bulging disc in her lower spine. Her initial treatment included an MRI, cortisone shot, and doctor’s visit, costing her a total of $3,000.

Even though she is in pain every day, Heck will not check out any further treatment options because she cannot afford to fall further in debt. Even though the symptoms have changed since the injury, she is not planning to visit a clinic for another assessment because an MRI costs $1,500, and it may not even help. Heck says that if the deductible on her plan was lower, she could explore other treatment options.

A Life-threatening Problem

It’s one thing to skip treatment to alleviate pain; it is another thing entirely to forego it when the consequences are potentially fatal. Unbelievably, physicians in the United States are suggesting that this phenomenon is real. According to a study jointly conducted by researchers at Harvard University and the University of California-Berkeley, people with HDHPs spent 42% less on health care before they met their deductibles. They did not achieve these savings by finding a better price; they simply reduced the amount of care received.

Jonathan Kolstad of UC-Berkeley said that patients were skipping crucial care such as medication for diabetes as well as potentially unnecessary care. Dr. Ted Mazer, the president-elect of the California Medical Association, said that in his experience, patients with conditions that affect their breathing and sleeping delay treatment. Shockingly, he also relayed details of occasions when patients put off a biopsy to see if an abnormal vocal cord was cancerous because of the cost.

Conclusion

There is increasing evidence that the entire “choose wisely” mantra of HDHP advocates is in fact causing patients to skip crucial medical treatment. A study by Harvard, published in March 2017, found that low-income patients who had diabetes and HDHPs delayed visits for issues such as pneumonia and skin infections. Sadly, they ended up getting expensive (even more so) care later on, as their conditions worsened.

Far too many people are in the HDHP trap; perhaps it is time to review the efficacy of these plans and come up with an improved alternative.