HDHPs Have Low Premiums But May Cost More Than You Think
High-deductible health insurance plans, or HDHPs, have grown increasingly popular during the past ten years. According to a story by Kelly Kennedy in Monday’s USA Today, 4.5 million Americans were enrolled in an HDHP in 2007. By last year, that number had jumped to 10 million, and it continues to grow.
HDHPs have lower monthly premiums than traditional health insurance plans, and offset these costs with a high annual deductible of about $3000 for individuals and $6000 for families. In general, they are less costly than traditional plans when they are not used often, but they can quickly get expensive if a customer has a health emergency or starts visiting the doctor more frequently.
As Tina Holwin-Hodges says in a quote in the USA Today piece, “It was the unexpected stuff that got us.”
That unexpected stuff can be caused by inadequate preventive care. Ms. Kennedy cites a study by the RAND Corporation that we blogged about earlier this spring. According to the study, people enrolled in HDHPs paid less than those with traditional plans, but also received fewer preventive services like annual checkups and screenings. Income did not play a role; wealthy people with HDHPs skimped on preventive care as much as poor people.
These people don’t realize that health plans waive fees for preventive services, and instead skip preventive care that would have been free, explained the study authors. As of last September, most HDHPs had to include basic preventive care. Other customers may avoid screenings because they do not want bad news or the additional expenses that may stem from the results.
Ms. Kennedy also explains that customers enrolled in HDHPs should shop around for services, particularly basic ones like annual physicals, which vary widely in price but not as much in quality and thoroughness. But you may have to be proactive about this, she cautions, and take the initiative to ask providers about prices.
Luckily, the industry is already moving in this direction, according to a blog post by Katherine Hobson of the Wall Street Journal. As we tweeted last month, price transparency could reduce health care spending by allowing customers to save small amounts at a time – small amounts that add up. While you may not switch primary care doctors to save a few dollars, knowing the differences in price may encourage you to find the best deal for prescriptions, imaging services like MRIs and x-rays, and lab tests. And those savings can lower your spending towards the deductible, letting you take full advantage of the lowered monthly premiums afforded by HDHPs.