Sun July 28, 2013
High-Deductible Health Plans, Gamble For Some, On The Rise
Near the end of last year, a big finance company in Charlotte, N.C., was doing what a lot of other businesses have been doing recently: switching up their health care offerings.
"Everything was changing, and we would only be offered two choices and each were a high-deductible plan," says Marty Metzl, whose husband works for the company.
High-deductible plans are the increasingly common kind of health insurance that have cheaper premiums than traditional plans, but they put you on the hook for thousands of dollars in out-of-pocket costs before the insurance kicks in.
According to the Kaiser Family Foundation, back in 2006, just 10 percent of Americans who get health insurance through their employers had a high-deductible plan. Today, more than a third have them, and that percentage is growing daily.
The trend, which could increase with implementation of the Affordable Care Act, has some doing the math before seeking care.
What's It Going To Cost?
For the Metzls, the options were deductibles of $3,000 or $4,500.
"After much angst and thinking and talking, we decided to choose the higher deductible plan," Metzl tells NPR's Jacki Lyden. "It really just felt like we were rolling the dice and gambling that none of us would get sick or have any catastrophic accident in 2013."
That gamble didn't pay off. Late one night, Metzl was working at home when she heard her husband yell for her to come to the bathroom. Her son had hit his head. She says that even though blood was running from his head and down his back, her thoughts quickly went to the family's insurance.
"It was like something out of a horror movie, and I was standing there thinking — instead of, 'Oh my gosh what happened to my son' — I'm thinking, 'Oh my gosh, how much is this going to cost if we have to take him to the ER at 11 at night?' " Metzl says. "I mean, I was horrified that that thought even came into my mind, but that's where my brain went."
The Metzls decided not to take their son in. Instead, they patched him up as best they could and sent him back to bed.
Making The Decision
Frank Wharam, a physician and researcher at Harvard Medical School, has been studying high-deductible plans since they first started appearing in the early 2000s. The reasons for the upswing are twofold, he says. First, there's the ever-present pressure on employers to save money. Plus, he says, the Affordable Care Act is driving up the numbers.
"It's going to be the result of the fact that there are mandates for people to be insured, so more and more people will be required to purchase insurance. And high-deductible health plans have the lowest upfront costs," Wharam says.
That's precisely the reason Brian Updyke has a high-deductible health plan. He's a freelance television producer, a job that makes finding health insurance especially difficult.
"They don't provide benefits. You're switching jobs every eight weeks, 10 weeks," he says. In the end, he bought his own plan — the cheapest on — with a $40 monthly premium and a deductible of $4,500.
High-deductible plans like his exempt a lot of preventative care — like regular checkups and cancer screening — from that deductible because of provisions in the Affordable Care Act.
Change In Behavior
For the first couple years, Updyke went to his annual doctor's appointment and that was that. But in 2009, he started having a little stomach pain and didn't rush to the hospital for help.
"I kind of went for a few days because I sort of was thinking it wasn't that painful," Updyke says; he thought it might be an ulcer or indigestion. But when he finally did get to the hospital, it turned out his appendix had ruptured.
A few days after surgery, someone brought him a laptop so that he could check on his health benefits — he didn't know how much treatment his insurance covered.
Katy Kozhimannil studies high-deductible plans at the University of Minnesota. She says the kind of confusion Updyke experienced is common — and so was his trepidation about visiting the emergency room, according to research.
"After transitioning to a high-deductible plan, men reduced use of the emergency room for all different kinds of visits and conditions," says Kozhimannil. That's different from the changes her studies have found among women; they tend to reduce their medical visits only for low-severity symptoms.
"It's possible that men are forgoing care because of those cost issues," says Kozhimannil.
Talk With Your Doctor
Wharam, who spends time every week in a clinic seeing patients, says that high-deductible health plans make it all the more important to figure out, with your doctor, the value of medical services.
"Some services are so important and valuable that no matter what the cost, the patient and physician should figure out a way that those services can be obtained," the Harvard physician says. That could be something like CAT scans to screen for colon cancer in high-risk individuals. Wharam agrees that their $1,500 price tag is high, but he says it's a cost worth incurring, unlike, for example, the cost of an MRI for lower back pain that is likely due to simple sprain.
Wharam says he's noticed a gradual uptick in the number of patients asking questions about prices and value.
"It's an interesting challenge because physicians don't know that. They don't tend to have a screen in front of them or the data in front of them to say how much a service costs," he says.
Finding The Positive
Ironically, while these high-deductible plans have some second-guessing their trips to the hospital, others have found ways to make the system work for them. Updyke, the Californian with the burst appendix, says that after he paid up to the level of his $4,500 deductible, he could get a lot more care for free.
"I had a small, benign cyst that was on my wrist. I had to have the doctor look at it, they were like, 'There's really nothing there, you can get it out if you want to, but it's not an emergency,' " he says. But later that year, he got it removed anyway.
As the Obamacare mandate kicks in this January, more and more people are likely to find themselves with high-deductible plans. And the White House is hoping Updyke is not alone in his satisfaction.
JACKI LYDEN, HOST:
This is WEEKENDS on ALL THINGS CONSIDERED from NPR News. I'm Jacki Lyden.
Near the end of last year, a big finance company in Charlotte, North Carolina, was doing what a lot of other businesses have been doing recently, switching up their health care offerings. Marty Metzl's husband works there.
MARTY METZL: Everything was changing, and we would only be offered two choices and each were a high-deductible plan.
LYDEN: High-deductible plans - those are the increasingly common kind of health insurance plans that have cheaper monthly premiums, but you're on the hook for thousands out of pocket before the coverage kicks in. For the Metzls, the options were deductibles of 3,000 or $4,500.
METZL: And after much angst and thinking and talking, we decided to choose the higher deductible plan. And it really felt like we were just throwing the dice and gambling that none of us would get sick or have any catastrophic accident in 2013.
LYDEN: That gamble didn't pay off. Late one night, Marty Metzl was working at home when she heard her husband yell: Come into the bathroom. Her son had hit his head.
METZL: And my son is standing in the bathtub with blood running down the back of his head and dripping down his back. I mean, it was like something out of a horror movie. And I was standing there thinking, instead of oh, my gosh, what happened to my son, I'm thinking, oh, my gosh, how much is this going to cost if we have to take him to the ER at 11 o'clock at night? I mean, I was horrified that that thought even came into my mind, but to be completely honest, that's where my brain went.
LYDEN: Marty and her husband decided not to take their son in. Instead, they patched the 9-year-old up and sent him back to bed. The Metzls are part of a trend. According to the Kaiser Family Foundation, back in 2006, just 10 percent of Americans who get health insurance through their employers had a high-deductible plan. By last year, that number had risen to over a third of Americans.
Frank Wharam is a doctor and researcher at Harvard Medical School. He's been studying high-deductible plans since they first started appearing a decade ago. The reasons for the upswing are twofold, he says. First, there's the ever-present pressure on employers to save money. And then there's the Affordable Care Act.
DR. FRANK WHARAM: There are mandates for people to be insured, so more and more people will be required to purchase insurance. And the fact that the health plans have the lowest upfront costs.
LYDEN: That's precisely the reason Brian Updyke has a high-deductible health plan.
BRIAN UPDYKE: I work in the TV industry, actually. I work freelance in production.
LYDEN: Freelance and the TV industry is not a recipe for employer-based health insurance, he says.
UPDYKE: They don't provide benefits. You're switching jobs every, you know, eight weeks, 10 weeks to a different show.
LYDEN: So to get insurance, he had to purchase a plan. He got the cheapest one he could find - about $175 a month for the premium with a deductible of $4,500. High-deductible plans like his do exempt a lot of preventative care from that deductible. Things like checkups and cancer screenings are fully covered. That's thanks to a provision in the Affordable Care Act. For the first couple of years, Brian Updyke got his yearly checkup, and that was that. Until 2009 when he started having a little stomach pain.
UPDYKE: I kind of went for a few days because I was thinking, it wasn't that painful, so I was kind of like, oh, maybe it's an ulcer, maybe it's indigestion. I didn't know what it was.
LYDEN: When he finally got to the hospital, it turned out that his appendix had ruptured.
UPDYKE: Within a couple of days, I was in a hospital bed. And I had somebody bring my laptop, and I wanted to look up what are my benefits, like what might this cost me because I had no idea.
LYDEN: Brian Updyke's confusion is far from uncommon. So is his trepidation about visiting the ER.
Katy Kozhimannil has studied just that. She's a researcher at the University of Minnesota who's looked at how men and women who switch to these plans change their health care decisions.
KATY KOZHIMANNIL: What we found was that after transitioning to a high-deductible plan, men reduced their use of the emergency room for all different kinds of visits and conditions, whereas women reduced their use of the emergency room for low-severity reasons, such as a sore throat or a headache. Men stopped using the emergency room for a sore throat and a headache, and they also stopped using the emergency room for cardiac arrhythmia, so an irregular heartbeat or kidney stones or other more severe conditions.
Another interesting thing we found in looking at that was after they transitioned to a high-deductible plan, they stopped going to the hospital. And in the second year, their need for hospitalizations increased. And what we draw from that is that it's possible that men are foregoing needed care because of those cost issues.
LYDEN: You know, the downsides seem pretty clear to me. You'll have this kind of sticker shock, the pressure on patients to get less care than perhaps they need and then get more expensive care because they've delayed basic care. The upside seems to mainly benefit the medical industry, or am I wrong about that?
KOZHIMANNIL: Well, I think there are a lot of upsides for patients and clinicians as well in that you don't go to the doctor when you don't need to because it's not an easy thing to go to the doctor, nor is it a pleasant thing. And I think we have problems in our health care system of both overuse and underuse. And I think what high-deductible plans are trying to do is to help people sort out for themselves what's valuable to them. And I think there would be greater satisfaction in the process if people had access to more information.
I was talking about this yesterday actually with my dad who has a high-deductible plan. And he said, you know, me and my friends, we take better care of our cars than we do of our bodies. And with our cars, we know how much it costs to get things repaired. We generally drive it until it doesn't run anymore, and then we go in and take it fixed. And we can decide at that point, you know, what types of fixes we're going to do, what types of preventative care we're going to do. And there's a list, and it tells us how much that's going to cost.
The same is not true with health care where it's really difficult for people to figure out how much something is going to cost.
LYDEN: Katy Kozhimannil of the University of Minnesota.
Dr. Frank Wharam, the researcher we heard from earlier, is a medical doctor as well. He says that high-deductible health plans underscore the importance for patients to discuss with your doctor which treatments are valuable.
WHARAM: Some services are so important and valuable that no matter what the cost, the patient and the physician should figure out a way that the services can be obtained.
LYDEN: For example, he says, for patients at risk of colon cancer, a CAT scan can be extremely valuable despite the high cost.
WHARAM: A contrasting example would be something like an MRI for low back pain that's probably just a sprain or a strain. That's a very expensive test that doesn't need to be done in the vast majority of cases.
LYDEN: Dr. Wharam has seen this firsthand at his own clinic. Though it's not yet frequent, he says he's noticed an uptick in patients asking questions about prices and value.
WHARAM: And it's an interesting challenge because physicians don't know that. They don't tend to have a screen in front of them or have the data in front of them to tell them how much a service costs.
LYDEN: Thinking about people who make the most of their high-deductible plans takes us back to Brian Updyke, the freelance TV guy in Los Angeles. When his appendix ruptured, he had to cough up that whole deductible $4,500. But after maxing it out, he figured, well, he might as well get some of that low-value stuff out of the way.
UPDYKE: I had a small, like, benign cyst that was on my wrist. It was nothing. Like, you know, I had to have the doctor look at it. They were like, there's really nothing there. You can get it out if you want to, but it's not an emergency. And I got that taken out.
LYDEN: We heard from a lot of people about their high-deductible plans, and not everybody was happy. But all in all, says Brian Updyke, he loves his plan. As the Obamacare mandate kicks in in January, more and more people are likely to have high-deductible plans. And the White House is hoping that Brian's not alone in his satisfaction. Transcript provided by NPR, Copyright NPR.