High deductibles and skipped care

Skipped care a side effect of high-deductible health plans | Local News | The Seattle Times.

Cammi Chase was thrilled to think she had solved the conundrum that is individual health insurance. Thanks to the Affordable Care Act and federal subsidies, last December Chase moved her family from an $800-a-month plan to one that cost about $240.

“I felt like we hit the jackpot,” she said.

But last spring when Chase was struck with an unexpected illness, the Seattle woman was shocked to realize how little her new health insurance plan — a Health Savings Account (HSA) with a deductible of roughly $5,000 — would cover.

Sorry, I’m confused. Why was she shocked? Does she not understand that a plan with a $5000 deductible means that the first $5000 is coming out of her pocket? Does she not realize that $5000 is a large amount of money?

The problem is that most clients can’t or won’t allow themselves to imagine that their health can take a turn for the worse, either via an accident, an unexpected illness or the development of a chronic condition. It just happens to other people. They see the low premium, which of course is a fixed cost, get an insurance card, avoid the penalty and they’re happy. They either believe they won’t become seriously ill or injured in an accident OR they think the insurance plan will change into a better plan if something happens to them.

Reading on, we see that Cammi was “banking that her health would be good”…

“I heard from the rumor mill that an HSA was the way to go because I’m self-insured,” Chase said. “I was really banking that my health would be good.” (emphasis added)

In the spring, after experiencing memory problems and swollen joints, Chase was diagnosed with latent Lyme disease.

“Immediately it included a lot of [doctor’s] visits and a lot of medication and monthly tests and lab work,” Chase said. And most of it wasn’t covered by her plan. “Every time I walk in I pay for the office visit, which is $165 each month.”

Let’s stop a moment here and note she said “most of it wasn’t covered by her plan.” Most likely that is not technically correct. I suspect the following occurred:

  • She received a network discount for the cost of her treatment
  • The amount she paid was applied towards her $5000 deductible

Of course, this situation could have been further complicated if she was seeing out of network doctors, but that’s an issue for another day.

For 2015, she used an agent, which is a path that I (of course) endorse and the result…

A financial person at her doctor’s office referred Chase to Sarah Freeman, a Seattle insurance broker who helped her find a new plan for next year. At $325 a month, the Premera Blue Cross plan she found costs a little more than her current plan, but it will pay more of her bills.

For now the family can afford the higher premiums, Chase said, but “I just hope it doesn’t continue to rise.”

A different broker mentioned in the article comments…

Despite the risks, Feltzs predicted the cheaper plans with higher deductibles will still be popular.

“I sell them all day because those plans do work for people who say they don’t go to the doctor or they rarely go,” said the broker. “They say, ‘I want to avoid the penalty [for being uninsured] and in the event that something does happen, I don’t want to break the bank.’?”

Which is a story I hear everyday as well. In the future I’m going to send this article to clients that are looking at bare bones plans.

One final note, it may seem that I’m being harsh on Cammi. I wish her nothing but the best, especially since Lyme disease can be a very serious condition with expensive medications. She is a very good example of an issue I encounter many times a week.


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