With the massive deductible staring them down, HDHP members tend to delay or skip care, leading to worse outcomes. (Photo: Shutterstock)
Open enrollment season has just wrapped up. Across the country, health care consumers have signed up for health plans that — if nuances aren't understood — could bankrupt them.
Medical debt is the leading cause of bankruptcy in the US. And of the millions of people who are victims of health care oppression, 72% owe less than $10,000 and 75% of people with medical debt had health insurance. A high-deductible health plan (HDHP) can have a family deductible of up to $14,100 — creating plenty of space to get trapped under medical debt.
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HDHPs were originally designed to get more people insured. The idea was that people would get preventative care and make better lifestyle choices and decisions about care because they're on the hook for such a large deductible. But as health care costs have soared, the 51% of Americans on HDHPs are increasingly vulnerable to health care profiteering.
Members forgo care, don't shop around
While preventative care is often free on HDHPs, the data shows that members don't realize that, or don't understand what is included under preventative care. Plus, with the massive deductible staring them down, members — even those with serious conditions such as cancer — tend to delay or skip care, leading to worse outcomes.
Consumers in an HDHP also don't have an incentive to find the lowest rate. If your deductible is $5,000, getting a $3,500 procedure for $2,500 doesn't help you — you've still got $2,500 to go before the insurance starts paying for care.
HDHPs should give people better options to shop and make educated and informed decisions about their care. Here are a few ways they could start.
Let prescription discount programs count toward the deductible
For many drugs, the cash price, or the price paid by someone without insurance, is lower than the copay. As a result, savvy consumers and organizations can access cash price networks through cards and apps to save money on prescriptions.
However, most of this spending does not apply toward the deductible. In addition, HDHPs often also have very high copays, meaning the people who would benefit most from prescription cash price networks have less incentive to use them.
As a result, both the consumer and their health plan end up paying more. Letting cash price transactions count toward the deductible benefits everyone, and technology could actually make this automatic and integrated with the consumer's benefit so all spending goes toward the deductible.
End the variable copay wars
Biologics such as Humira, which treats rheumatoid arthritis and other conditions, can cost a hundred thousand dollars per year of treatment. Patients on HDHPs who would greatly benefit from these drugs often don't try them because they would have to pay for the entire first dose out of pocket in order to meet their deductible.
In response to this problem, drug manufacturers created variable copay assistance programs that cover the cost of the first dose so that patients can try the drug. Initially, this worked very well.
However, health plans began not to count this assistance toward the patient's copay and now almost none of them do. As a result, the first injection is reimbursed from the manufacturer, and the patient has to pay for the second one to meet their deductible.
If assistance comes from any other source, such as a generous family member, it's not a problem. The fact assistance from the drug manufacturer doesn't count toward the deductible is an unreasonable double standard.
Create a culture of assistance and innovation
Insurers and consumers should work together to avoid financial catastrophes. From the outset, HDHPs should come with outreach and education so consumers understand the potential costs. Way too many people walk into a hospital because they need care believing they will be covered by insurance and then are blindsided by a bill for their entire deductible all at one time. In addition to partnering with their customers, if insurers are willing to be more flexible about what counts toward the deductible in HDHPs, it would spur innovation for cost-saving products and programs. Health plans need to negotiate transparent, lower rates for when patients have to pay the bill, similar to the "cash rates" that exist for generic drugs today.
Currently, health care entrepreneurs working to lower health care costs in the US aren't able to do a whole lot to help consumers on HDHPs. As a result, everyone — consumers, health plans, and a health care industry in need of innovation — loses.
Michael Waterbury is CEO of Goodroot, a community of companies committed to reinventing health care one system at a time.
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