Consumer and Provider Costs

Over the past years HDHPs have become the point of high interest to employers, policy makers, and the health care industry in general. According to America’s Health Insurance Plans research, enrolments in HDHP/ HAS reached 21.8 million as of January 2017.

This form of health insurance wants to control healthcare costs by creating cost-conscious healthcare consumers who will look for "health care value". Even though this is a low-cost and affordable insurance, it has brought up a number of pros and cons about its productivity and effectiveness.

Among most significant aspect in considering an HDHP, the consumer has to make sure that it can afford the maximum out of pocket costs if anything major happens.

A high deductible health plan may be a good choice for healthy and rarely sick or injured people; people who can afford to pay deductible upfront or within 30 days of receiving a bill for that amount if an unexpected medical expense comes up; people who are healthy and interested in using an HSA as a way to save or invest. HDHPs have lower affordable premiums then non-high deductible health plans but with a higher deductible then other insurance plans.

On the same consideration, consumers that are not on expensive medications and take medication occasionally for acute conditions could save considerably on their monthly health care insurance bill by having a HDHP.

Policyholders can open a Health Savings Account (HAS) which is a tax-deferred savings account, to help cover out-of-pocket expenses and help them pay the deductible. Once the deductible is met, the insurance starts paying for the services. The money left in the savings account earns tax-free interest and any unused funds belong to the consumer and are carried over from year to year.

From the other point of view shifting more and more people to high-deductible plans as a solution to our healthcare system will likely cause harm to sick people and people with chronic illnesses due to the high out-of-pocket costs for their ongoing treatment and resulting in much cheaper rates for healthy people.

Office visits, prescriptions, and diagnostic tests will entirely be at the expense of the consumer and also if surgery is needed the insurance company will not pay anything until the deductible is reached.

High individual and family deductibles is another aspect to take into consideration when choosing a high deductible health plan. Deductibles can be from at least $1,350 for an individual or $2,700 for a family up to $6,650 for an individual or $13,300 for a family.

Conclusion

There are advantages and disadvantages when choosing a HDHP and a good way to do a well thought choice is by doing research. Research helps in making an educated decision, and in choosing the right health insurance plan for you.



References:

Aaron Carrol. (February 2011). High deductible plans for those with chronic conditions

Amy Fontinelle. ( March 2018). How High-Deductible Health Plans Work.Investopedia. Retrieved from: https://www.investopedia.com/articles/personal-finance/012716/how-highdeductible-health-plans-work.asp

David Rook. (February 2017). The Pros and Cons of High Deductible Health Plans HDHPs. JP Griffin Group. Retrieved from https://www.griffinbenefits.com/employeebenefitsblog/pros-and-cons-high-deductible-health-plans-hdhps

Lacie Glover. (October 2017). Choosing Between a Low- or High-Deductible Health Plan. Nerdwallet. Retrieved from: https://www.nerdwallet.com/blog/health/high-or-low-deductible-health-insurance-plan/

Retrieved from: https://theincidentaleconomist.com/wordpress/high-deductible-plans-for-those-with-chronic-conditions/

Waters, T. M., Chang, C. F., Cecil, W. T., Kasteridis, P., & Mirvis, D. (2011). Impact of High-Deductible Health Plans on Health Care Utilization and Costs. Health Services Research, 46(1 Pt 1), 155–172. http://doi.org/10.1111/j.1475-6773.2010.01191.x

What is an HSA or Health Savings Account? Humana. Retrieved from:https://www.humana.com/all-products/understanding-insurance/health-savings-account

Assie Longhart. (March 2018). The Impact of Federal and State Policies on Consumer Costs. https://www.linkedin.com/pulse/impact-federal-state-policies-consumer-costs-cassie-longhart