insurance

The risks of high-deductible health plans

High-deductible health plans, or HDHPs, also known as catastrophic health insurance, have become popular as the cost of premiums skyrocket. HDHP monthly payments are relatively inexpensive compared to other plans; coverage, however, only kicks in after a significant deductible is met.

Many plans encourage preventive care by covering annual checkups at no additional cost to the policyholder. But out-of-pocket expenses to see a doctor for sick visits and to see certain specialists, such as dermatologists, for well visits are incurred by the consumer.

Do HDHPs discourage doctor visits?

And that raises a question, the answer to which may be harmful to your health. Do consumers who have high-deductible plans hold off on seeing a doctor when they're ill? According to Paul Fronstin, director of the Health Research & Education Program at the Employee Benefit Research Institute in Washington, D.C., and a leading authority on the issue, there is not yet a clear answer. "No one has been able to link account information with medical claims in order to get at the question," he says. He expects that they will be able to correlate that information by the end of the year.

There is other evidence, however, that HDHPs are associated with less responsible medical behavior at the consumer's end, particularly among high-risk patients. A Harvard Medical School/Harvard Pilgrim Health Care study reports that among families in which at least one member has a chronic health issue, HDHPs are associated with a higher probability of delayed or forgone care due to cost.

Professor Timothy Jost, who teaches health law at Washington and Lee University, said that the Harvard study supports what he has known for some time. "When enrolled in HDHPs, policyholders tend to cut back on taking medications as prescribed," says Jost. "Also, there's growing evidence that reduced utilization is not rational; people that cut care do not necessarily do so in the areas recommended by medical professionals."

Washington director of the organization Consumer Watchdog Carmen Balber agrees there's risk in HDHPs. "The Harvard research is just the latest of countless studies that have come to the same conclusion: patients with high deductibles delay or skip care because of high out-of-pocket costs," she says.

Increasing popularity

Given pressure to cut costs, more and more businesses are selecting high-deductible health plans. "I have several clients who've saved thousands in premiums," says Jay Gerlitz of The Gerlitz Group and Health Plans NY, who sells insurance to large and small companies in the New York City area. Gerlitz strongly advises those considering HDHPs to do a thorough evaluation of their past year's medical expenses and then project for upcoming procedures and tests. "Look for the worst-case scenario, and compare monthly costs for all of the possibilities to gauge your potential for higher out-of-pocket costs than you'd pay with a low- or no-deductible plan," he says.

Gerlitz also notes that plans can differ by state, by county and by insurance carrier with some companies offering much better plans than others.

If you have a high-deductible plan, know that -- as evidence suggests -- you may be at high risk to forgo getting the best care at the right time. Or, you may cut back on nonurgent wellness care.

"For several years, I've endured increasing premiums -- I've finally reached the tipping point and plan to move to a HDHP," says Grace Ascolese, a market research consultant in Northern Virginia. Ascolese says that insurance premiums outpaced her medical visits in 2011. "More important to me is the fact that my insurance plan has been covering a lower proportion of my medical bills; clearly, it's time to jump ship." Although she doesn't expect to cut back on doctor visits, Ascolese predicts that the new policy will affect some of her wellness visits, such as seeing a nutritionist.

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