Amen!
The health insurance industry is more complex than ever before thanks to the rapid erosion of the traditional health care model, a surge in high-deductible plans and a major shift toward consumer accountability.
According to the Kaiser Family Foundation, the average deductible climbed to $1,217 in 2014 – an increase of 47 percent in just five short years. In addition, Commonwealth Fund researchers found that premiums for families with employer-funded insurance rose 73 percent while premium contributions by employees soared by 93 percent in the last decade.
The avalanche of health care choices and responsibilities has forged a new world for consumers who are not only facing ever-increasing deductibles, but also tasked with understanding a growing number of services and accounts. Consumers need to better understand all of their options, become more educated about the benefits they choose and stay fully informed about what their decisions mean for their health (and their finances).
As we continue to ask individuals to shoulder more financial responsibility for their health care needs, there’s a fundamental mistake we first need to address as an industry: The belief that individuals understand health care as it stands today. They don’t.
Between deductibles, out-of-pocket limits, co-insurance, health savings accounts, flexible spending accounts, and all the other terms we throw at them, the typical consumer doesn’t understand the ins and outs of their health care policy. While they might know if something is covered or not, they still aren’t 100 percent sure what all of the numbers in their bill, health statement and/or explanation of benefits documentation actually mean.
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They didn’t know the in’s and out’s of their health coverage before Health Reform either. Ask them about their auto insurance policy and you get the same result.
You and the experts at the New York Times or the policy wonks in the beltway have it all wrong. HDHP Health Savings Accounts are the solution – where people start in such a plan at birth, and continue throughout their lifetime, where the residual in the Health Savings Account is passed to their heirs.
But, a HDHP/HSA is not a short term solution. It won’t work if only used in 2015. It won’t work for those who chose health care coverage solely with a focus on the next calendar year. Instead, until people have some financial exposure, and that financial exposure is repeated frequently (at least annually), they will be unwilling to make the investments in preventive services, exercise, eating habits, etc. necessary to improve health (or maintain good health) and and to minimize acute health care and those expenses. Keep in mind that a significant percentage (thankfully a minority) of Rx and treatment is either unnecessary or simply wrong.
At historic levels of increase, back when we had copays and no deductible HMO options, there was a 30 year period where we were averaging just under 10% per year, in year over year cost increases. At that rate, in less than 80 years, where health care costs increase 10% and the rest of the economy grows at 2% (current GDP levels), the entire US economy will be health care – we won’t be flipping each others hamburgers, we will be administering each other’s medications.
So, a HDHP/HSA process allows people, assuming they are enrolled at birth, to accumulate sufficient assets so that they can decide what to buy and what to forego. And, because no individual, and frankly no employer can cover the cost of a catastrophic loss, we need a social solution (a national “stop loss”) for those who trigger significant expense … whatever the attachment point you choose, $25,000 per event, per year, whatever. That would be funded by taxpayers – a kind of a Medicare umbrella coverage, where society decides what is to be paid, done, covered where individuals are unable to shoulder the cost directly.
You have all seen it, people who schedule elective treatment/surgery, because “we have already satisfied the deductible this year” or “we have hit our out of pocket expense maximum this year”. We used to see comparable levels of utilization when there was only a copay for services, and where hospitalization was 100% covered (remember 2nd opinions?).
Bottom line, everyone in America other than the weenies who gave us health reform knew, know and still know that it is the cost of health services that is the #1 issue.
Instead, PPACA focused on extending coverage – where the majority who were uninsured had access to coverage, just that they were not willing to pay the cost. For example, only maybe 400,000 signed up for the pre-existing condition coverage – so, health reform wasn’t needed because of the big bad insurance companies. And, there has not been any discernible change in bankruptcies specifically attributable to the presence of health reform’s access to coverage.
Somehow, for some reason, we think government intervention is needed for routine medical expenses, routine preventive services, etc. instead of relying on a marketplace solution as we do for food, clothing, housing, cars, etc.
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I think u are dead wrong on this. The HDHP is a pure financial burden on average people and does not dissuade people from health care except perhaps taking a generic. Even if a few office visits are missed, the real expenses will not be changed and one incident can wipe out years accumulated HSA funds. And you assume the average person now faced with increased retirement responsibility can also save in an HSA or carry thousands more in health care costs. Most cannot do that. The answer lies in the health care system and how care in rendered more than trying to turn patients into physician assistants making determinations about care. Why should the patient seek out the lowest price MRI as opposed to the referral only being made to the best, most efficient facility?
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