No one likes to waste money. And most of us are price conscious. We shop around, check the internet, and ask friends for advice, all in an effort to get the best price on the right product for our needs. However, when it comes to medical expenses, is it wise to forego appointments, medications and treatments because of cost? Clearly not. But delaying or foregoing medical care is becoming more common with the increase of high deductible health plans.
What exactly are high deductible health plans (HDHPs)?
HDHPs requires patients to pay 100% of health care expenses until a high deductible is met, with some exceptions for preventive screenings. The monthly premiums are generally lower than with traditional plans.
The IRS defines an HDHP as any plan with a deductible of at least $1,300 for an individual or $2,600 for a family, but these are the minimums – the deductibles can actually be much higher. A report by the Kaiser Family Foundation found that the average deductible for those with HDHPs is $2,100 for an individual, and $4,364 for a family. And these are averages – so some are paying even more (and of course, some are paying less).
HDHPs are offered through employer insurance programs, and are also common on the ACA exchanges. Most HDHPs offer free preventive screenings.
How common are these plans?
HDHP are becoming increasingly common.
According to the CDC, the percentage of adults (aged 18–64) with employer provided health coverage who enrolled in an HDHP increased from 26.3% in 2011 to 39.3% in 2016.
Are high deductible health plans keeping people from getting needed care?
The simple answer is yes. Some of the research findings:
- According to a 2020 report by the Physicians Advocacy Institute, 80% of doctors state that patients refuse or delay care care due to the cost, and 79% believe HDHPs are the cause of these financial concerns.
- A CDC report states that in 2016, 9.2% of those with an HDHP did not get care, or delayed care, due to cost, as compared to 5.2% of those with a traditional plan (among adults aged 18–64 with private insurance).
- A study published in Health Affairs reviewed previous studies on the impact of HDHPs. They found that these plans were associated with a significant reduction in preventive care and in office visits leading to a “reduction in both appropriate and inappropriate care”. The study also found evidence that HDHPs may negatively impact medication adherence.
- A 2015 survey by Families USA found that 29.8% of individuals with deductibles of at least $1,500 (for single coverage) avoided medical care because of money, including tests, treatments, and prescription drugs.
Avoiding medical care is generally not a good idea!
Although there is widespread concern that Americans are getting too many tests and treatments, it is generally not good for your health to avoid medical care due to expenses.
Your health can worsen if you put off appointments, tests, medications and treatments. What starts out as an easy to cure Stage 1 cancer can turn into a deadly Stage 4 case if symptoms are ignored and treatment is delayed.
High deductible health plans can make it harder to pay medical bills.
It’s not at all surprising to learn that those who have HDHP have more problems paying their medical bills. In 2016, 15.5% of those with an HDHP struggled to pay medical bills, compared to 10.3% of those with traditional insurance plans (among adults aged 18-64 with private insurance).
This struggle makes sense. If you have a family plan with a $4,000 deductible, you might find yourself with an unexpected $4,000 in medical bills if you, or a family member, develops a serious illness or has an accident. And that is beyond the means for many.
Medical bills are already a significant cause of personal bankruptcy in the US – it seems to me that the increase in HDHPs is only going to make this problem worse!
Should you choose an HDHP?
If you have a choice between a traditional plan or an HDHP, do your homework before enrolling each year. Calculate the yearly cost of monthly premiums plus the deductible. Review how much you have spent in previous years on medical bills, find out what services are free in the HDHP, and consider any upcoming planned procedures or surgeries. Consider how risk-averse you are – what will you do if you have unexpected high medical bills if you enroll in the HDHP? It can be a tough decision, but doing some homework can help you make the best decision for you and your family.
What should you do if you have a high deductible health plan?
Don’t neglect your health!
First and foremost, don’t let money keep you from needed medical care. If you can’t afford your medical care, there are options that may help. Ask your doctor or the hospital’s social work department about lower cost alternatives or options for payment plans. Visit the Zaggo Resource Center for a list of organizations that provide financial help for medical expenses and medications.
Get to know the details of your policy.
Be sure you fully understand what is covered and what is not. Find out which doctors, hospitals and labs are covered. And then try your hardest to only use “in-network” doctors and facilities.
Learn what’s free.
As mentioned above, researchers found that people with high deductible health plans avoid preventive care, which is often free.
Find out what services are free under your plan and take advantage of them. Most plans provide free preventive screenings, such as mammograms, colonoscopies and vaccinations.
Shop around! Wisely.
Prices can vary significantly from one provider to another. This is true for doctors, procedures, surgeries, tests and medications.
Don’t be afraid to ask your doctor or other provider what the expected cost of a test, treatment or procedure will be. A recent survey found that only 27.6% of Americans ask for pricing information about health care/medical procedures. However, getting pricing information might prove to be tricky. The survey also found that most people are likely to have difficulty in finding the prices they would need to make more informed decisions.
You can also try to get pricing information from your insurance company. Most insurers provide online lists of in-network providers, some even have cost-estimator tools. If your insurer doesn’t provide this information online, you can call them to get quotes for providers in your area. It can be helpful to have a list of potential providers – doctors, hospitals, clinics, etc. – before you call.
For more information read Can You Comparison Shop for Healthcare Services? Yes, and You Should! and How to Shop Around for Healthcare Pricing.
A few caveats.
Keep in mind that not all medical providers offer the same quality services. Some lower cost alternatives are safe, professional options, while others might provide sub-par services that could be ineffective or dangerous. Ask your doctor for referrals and ask your friends and family for recommendations. Additionally, there are many websites where you can evaluate doctors and hospitals – see the list in Zaggo’s Resource Center.
Save money on prescriptions.
When getting a prescription medication, ask your doctor if there is a less expensive alternative or a generic option. However, don’t be surprised that doctors often have no idea how much medications cost! Since prices for medications can vary, call pharmacies and ask for a quote. In some cases you may need to call your insurer. For more information on saving money on medications, read these blog posts How to Save Money on Prescription Medications.
However, if you want to shop for prescriptions online to save money, beware of bogus pharmacies with very professional-looking websites. For more information, read my blog post on black market medications.
Avoid overtreatment and overtesting.
Americans are getting too many tests and treatments which can increase your health care costs. Read my post on the dangers of too many tests and treatments to learn more.
Avoid unnecessary emergency room visits.
Generally, ERs are the most expensive place to receive care. When possible, visit your doctor, a retail clinic or urgent care center. Of course, you want to get the level of care you need in any situation. If you are managing a serious medical condition, ask your doctor what symptoms require a visit to the ER.
For more information, read my blog post: Do You Need an ER, Urgent Care or Retail Clinic?
If you know you will need expensive medical care (e.g. surgery), schedule it as close to the January as possible. Once you spend your deductible on this high cost care, your care for the rest of the year will be deductible free – you will only have to pay your portion.
Once you reach your plan’s out-of-pocket maximum, you will not have to pay for any care. In this situation, try to schedule your upcoming expected care before the end of the year – it will be free!
Take advantage of health savings accounts (HSA).
Enroll in an health saving account (HSA) – through work or on your own. Put some pre-tax earnings into it, which you can then use for medical expenses. If you don’t spend the money in a given year, it rolls over to the next year, tax-free. And you don’t lose it if you leave your job. It’s a great way to save money!
Need help with bills?
For more information…
Read these blog posts to learn more about money related matters:
- The Impact of the High Cost of Healthcare
- Reduce Your Healthcare Expenses.
- Tips for Handling Medical Bills
Note: I updated this post on 7-1-20.