For tens of millions of Americans, the start of a new year means the counter has gone back to zero on their health insurance deductibles. If they need health care, they’ll pay for some of it out of their own pockets before their insurance takes over.
But what do those plans mean for people with common chronic health conditions such as diabetes, asthma, joint problems, and heart disease? The short answer: a hit to their wallets.
People with chronic conditions who choose deductible-based plans should be prepared to spend hundreds or even thousands of dollars of their own money on their care—perhaps even beyond what they spend to buy the insurance plan in the first place.
The results of a new study show the impact of high-deductible health plans that now cover 40 percent of Americans who buy their own health insurance or get it through an employer. Data from a national survey of Americans younger than 65 show that having a high-deductible plan makes it more likely that health-related costs will take up more than 10 percent of a chronically ill person’s total income.
Researchers uncovered wide disparities in out-of-pocket spending among patients with the same condition, even for those in low-deductible plans. Despite these out-of-pocket costs, few people with chronic illnesses say costs or insurance coverage issues had gotten in the way of getting the care or prescriptions they needed.
“Increasingly, these plans have become woven into the fabric of health insurance in America, so it’s important to look at the impact of deductibles on people who need care on an ongoing basis,” says senior author Jeffrey Kullgren, assistant professor of general medicine at the University of Michigan Medical School.
“Not only on how they spend their money on care for their everyday health needs but also how that affects spending in the rest of their lives.”
For the study, published in JAMA Internal Medicine, Kullgren and first author Joel E. Segel, a health economist at Penn State, analyzed data from 17,177 people interviewed for the Medical Expenditure Panel Survey, a nationally representative survey conducted by the Agency for Healthcare Research and Quality. The data were collected from 2011 to 2013 when many more employers started offering high-deductible health plans.
Of all the respondents, slightly more than 4,100 had a high-deductible health plan, and more than 7,600 had a chronic health condition. About 45 percent of those with high-deductible plans had at least one chronic condition.
Researchers looked at data from people who had heart disease, high blood pressure, diabetes, asthma, joint diseases, cancer (except for skin cancer), and mood disorders such as depression. They compared those patients’ out-of-pocket costs against those of individuals with none of these conditions. The data encompassed those who had plans with high deductibles, low deductibles, and no deductibles.
“One challenge of high-deductible health plans is that clinical decisions made in a doctor’s office are often completely disconnected from the reality of what a patient has to pay out of pocket.”
In 2013, a plan was considered high deductible if it asked patients to pay the first $1,250 in care costs for an individual or $2,500 for a family. Only people with deductibles above this amount qualify to open a health savings account that lets them put away cash to use tax-free to pay for some health costs.
The data primarily come from the time before people who needed to buy their own insurance could do so on the HealthCare.gov marketplace. Since the launch of the marketplace, more than 90 percent of shoppers have chosen high-deductible plans.
Lower-income people who choose silver-level marketplace plans can get assistance with out-of-pocket costs from the federal government. But those who opt for bronze-level plans with high deductibles—but lower monthly premium costs—aren’t eligible for deductible help. Neither are people who make more than the income limit or receive coverage outside of the marketplace.
“If changes in health policy remove marketplace subsidies, that could rewind the clock to the era we studied,” says Kullgren, who specializes in studying the impact of consumer-directed health care plans—a phrase that encompasses those with high deductibles or other cost-sharing arrangements.
What will it cost?
He also studies how the companies that run such plans or offer them to their employees can help participants understand the costs and medical choices they will be responsible for.
“A lot of plans, employers, and policymakers are using these plans as vehicles to make consumers more active in their care, more cost-conscious, and more interested in optimizing the value of their care,” Kullgren says. “This includes offering price-transparency tools that people can use to see what the care they need will cost and quality tools to show which hospitals or providers offer the best value.
“But we don’t know yet how often people are using these tools to help them get the care they need and avoid the care they don’t need, nor how well the tools serve their needs. We need to focus on helping people who are in these plans use them better.”
Kullgren is analyzing national survey data from people enrolled in high-deductible health plans who were asked about these topics. He is also partnering with Priority Health, a major private insurer, to design a pilot project that will launch early this year. It will test a price transparency tool that patients and health providers can use together, during a clinical appointment, to make decisions based on medical need and cost.
“One challenge of high-deductible health plans is that clinical decisions made in a doctor’s office are often completely disconnected from the reality of what a patient has to pay out of pocket,” he says. “Patients have to decide whether and where to get a service, such as an operation, lab test, or medical imaging exam, that they must pay for under their plan. These are decisions where clinicians can help patients navigate—and in some cases help them avoid care they don’t need.”
Researchers from the University of Michigan Medical School and Penn State and from the VA Ann Arbor Healthcare System are coauthors of the study.