High Deductible Health Plans: A Case Study

Kutscher, B. (2015, June 24). High-deductible plans change how hospitals interact with patients. Modern Medicine, para 1.

The consumer driven health plan (CDHP) is a combination plan, one with a high deductible plan and one with a tax-preferred savings account plan directed by the patient. The plans work together for the patient with the high deductible for major losses and the savings accounts for out of pocket expense or non-covered expenses. With the CDHP, patients are more inclined to research their medical care in order to make informed decisions (Valerius, Bayes, Newby, Seggern , 2008).

Rising health insurance premiums have made healthcare unaffordable in the United States. Health insurance premiums in this country have undergone a steady rise over the past few years while incomes have remained the same. More than 50% of individuals with low incomes holding private insurance in the United States are unable to afford their healthcare costs (Collins, Gunja, Doty & Buetel, 2015). In addition, costs related to healthcare are equally unaffordable to 25% of working-age individuals who hold private health insurance policies (Collins et al., 2015). According to the Kaiser Family Foundation/Health Research and Educational Trust (Kaiser/HRET) survey on employer health benefits, employer-sponsored health insurance plans have also had moderate rises in premiums in 2013 for both individuals and family coverage (Claxton et al., 2013). While

There have been many studies performed focusing on the rising costs of health care and some of the findings state that the rising cost of healthcare premiums is a worldwide problem. However, I believe they are higher in the U.S. In 2015, U.S. health care costs were $3.2 trillion. That makes healthcare one of the largest U.S. industries, equaling 17.8 % of the Gross Domestic Product (GDP) in comparison to the late 1960s; where healthcare costs were only $27 billion, or 5% of the GDP, which averaged $9,990 per person each year. The main reason for the rising cost of healthcare is a combination of government policies and lifestyles changes. Examples included lack of coverage or costly coverage, lack of available coverage for

Recently, a Consumer Driven Health Plan (CDHP), was created. There are many variables to a CDHP, such as benefits covered and coinsurance amounts, however there is one thing that all CDHP’s have in common – a high deductible. By having a high deductible, such as $1,200, it forces the plan participant to think about the medical services they are seeking. Do they really have to go to the emergency room for that cough or can they go to urgent care, or better yet, their physician the next day. When the plan

In 1954, Congress passed legislation allowing employers to provide health insurance benefits to employees on a tax-free basis (Sih and Singh 99). This legal provision marked the beginning of the rapidly expanding health care costs still apparent today due to the major incentives provided by the government to obtain employer-based health coverage. The overwhelming popularity of employer-based health insurance has led to a serious market inefficiency resulting from the system of third-party payment. As individuals rely on their insurance companies to pay for their medical expenses, this provides

Employers are continuing to face rising health benefit costs and are constantly looking for alternatives to control these escalating costs. Health benefit premiums continue to increase at a double digit pace for employers and employees (Poor, Ross & Tollen, 2004). This escalation is putting environmental pressures on all impacted stakeholders. Companies and insurance providers are squeezing this industry to get a handle on cost while still providing an appropriate level of care. This cycle puts the patient front and center as the ultimate stakeholder who incurs changes in health benefits. This mandate of cost control, efficient operations and market share has facilitated a constant analysis of the dynamic health

Another downside to High Deductible Health Plan (HDHP) is the apprehensiveness to use the insurance, even the benefits that are free or at a low cost. “Enrollees in high-deductible health plans are likely to reduce the preventive care use and are largely; because they are unaware of the fact that preventive care benefits are free or at a low cost (Dolan February 2016).” Recent analysis showed that low-income workers were more likely than higher earners to avoid certain kinds of care when they were enrolled in high-deductible plans coupled with savings accounts. The analysis from the Employee Benefit Research Institute, found that low-income people even skipped free preventive services like flu shots and cut back on doctors’ visits. Primary and preventive

For those Americans not covered or find their work coverage too expensive, there is a new way for them to buy insurance on their own called Health Insurance Marketplaces. Some states have named these marketplaces something else. The Health Insurance Marketplace is like a virtual insurance megamall where private insurers compete for American’s business. Americans can pick out how much coverage they want, how much they want to pay for it, from cheaper high deductible plans to more expensive plans. Regardless what plan is chosen, all plans will cover a complete set of services like hospital visits, doctor visits,

Patient financial services in managed care environments are now challenged with gauging the patient’s ability to pay with the increase of liability on high-deductible health plans. “The inability of many consumers to pay high deductibles is projected to produce outcomes that damage bottom lines of healthcare businesses” (Boland, PhD; Gibson, PhD; 2014).

Astronomical costs together with increased numbers of uninsured citizens in the United States creates an environment where health care premiums continue to grow at an astronomical rate with many businesses simply choosing to not offer a health plan—or if they do—they pass on more of the cost to employees. Employees facing higher health care premiums often choose to go without health coverage. Being uninsured does not mean going without health care; there are many clinics and services that are free to indigent individuals. However, any costs not covered by insurance are absorbed by the rest of the population, which translates to higher premiums for the middle class. (Messerli, 2014)

In the United States, the number of uninsured continue to increase everyday with no solution. "As of today the number of uninsured American remained at 10.9 % in the fourth quarter of 2016"(Holahan, 2017). In today economy where unemployment is at an all time high, millions of peoples are without insurance due to unemployment. There are also a lot of uninsured American that are employed, that can't afford insurance.

Many employees must designate a health plan through their employer. These days, as HMOs (health maintenance organizations) and managed care plans continue to proliferate, that means a choice between bad and worse. As employees line up in the lunch-room for a process called open enrollment, they may be surprised to learn that managed care rates have gone up — again. The mirage that managed care is cheaper care is finally fading. And, for the first time in years, employees may also have the promise of free choice in medicine in the form of a new method of financing health care. Consumers are already aware of horror stories involving HMOs, but cheap rates persuaded many that managed care is less expensive. Recent

Under the current healthcare reform bill HR-4872, there are several stipulations that will benefit everyone. The proposed bill eliminates the “Pre-existing Condition” clause that insurance companies have been manipulating around for many years. How many people have been stuck in dead end jobs, unable to further their career for the fear of being denied insurance coverage due to a pre-existing condition. The bill (HR-4872) also makes purchasing health coverage affordable. Under the current American system, the health insurance providers can pass on rate increases to the consumers without regard to the clients ability to pay or their after taxes income. It is estimated that healthcare insurance costs have increased as much as 18 – 25% over just the past three years alone. This dramatic increase in premium expenses has put healthcare insurance out of the reach of millions of Americans.

The Federal Employee Health benefit program is the largest employer health insurance program in the United States, insuring about 3 percent of all Americans. There are 133 plans, offering 188 coverage options that are participating in the FEHBP as of 2003. Preferred provider organization (PPO), fee-for-service plans, and Health Maintenance Organization (HMO) all offer options. The government’s contribution toward the cost of the beneficiary’s premium is “lesser of 72 percent of the average FEHBP plan premium, weighted by enrollment, or 75 percent of the premium for the plan chosen” (Karen Davis) .