When Do High Health Insurance Deductibles Become a Problem?

High Deductibles in San Diego, CA

A study from HealthAffairs.org cites America is in the midst of the most sweeping health insurance expansions and market reforms since Medicare and Medicaid were created. Mandated coverage has introduced a seismic shift in the number of high deductible health plans (HDHPs) being offered, which may lead to a few problems. The staff at Tri-Star Insurance Chula Vista discusses some of these concerns.

For policyholders, these higher deductibles translate into higher out-of-pocket (OOP) expenses because their Chula Vista health insurance coverage doesn’t kick in until the deductible is met. This causes policyholders to scramble to find ways to pay for prescription medicine, office visits, tests, and various other medical services that may have been covered when they had policies with lower or no deductibles.

In a perfect world, you set aside money for your deductible, put it into a savings account, and then it’s available for unexpected health events. This can become a problem when the mandated health insurance premium is higher than expected, and OOP expenses account for 8-21 percent of income in some cases, leaving policyholders to struggle with the decision of paying for either medical care or the mortgage. Too often, after meeting basic living expenses, there is very little room for savings.

Problems can arise with expected health events as well. Those who take prescription medications are discovering the cost of refills has increased while the level of coverage has decreased. This gap has left many standing in line at the pharmacy to pick up their prescriptions, only to discover they don’t have enough cash or credit to cover the costs. They then need to make a choice between purchasing and delaying medications.

A 1970 RAND report suggests HDHPs discourage people from seeking necessary health services instead of encouraging them to make smart consumer and lifestyle choices. More recently, a study in Massachusetts suggested delaying medical treatments for financial reasons results in an increased use of high-cost emergency room services and hospital stays. For example, smart consumer behavior would discourage people from running to the doctor every time they got the sniffles or other inconvenient, yet non-life-threatening ailment. In practice, people who should seek a doctor’s advice may forego necessary care because they fear the expense, which then results in a small health matter becoming a larger and more expensive ordeal.

This problem can be mitigated with education about which preventative and routine checkups are covered without OOP expenses on an HDHP. Because early detection and prevention could reduce higher risk and higher cost procedures later down the road, time and money spent to inform policyholders now might lead to savings.

Deductibles and the way they work can sometimes be tricky to understand. For more information on health insurance or for free Chula Vista car insurance quotes, get in touch with American Tri-Star at 619-827-0522 and speak with one of our knowledgeable agents. We hope to hear from you soon.