Passing on the Costs

The other day, when writing about choosing a child care provider, I alluded to the fact that decisions like child care or health care are "not simple ones with easy choices between good and bad." They require information that the decider does not have.

Today's Pioneer Press carried a Kaiser Health News story that made my point for me, titled High Health Insurance Deductibles Hit Fortune 500. As costs have continued to rise for our bloated and inefficient system of care, even large employers have begun to move their employees to high-deductible plans.

Supporters say the plans can contain health costs. Patients who have to pay for care up front will take better care of themselves and shop more carefully, the thinking goes, seeking lower-cost providers or asking whether tests are necessary.

That quote might be correct with a few revisions: Seeking lower cost providers who aren't doctors, maybe. Refusing tests that are necessary. How can a person who's sick judge whether a test is necessary? We don't have enough information to know the answer. But we do know if we can afford it or not, so if it's not covered by insurance, it's pretty easy to know which way the question will be answered.

The Kaiser story sited the Wenger family, whose daughter has juvenile arthritis. Under a new high-deductible plan, their "out-of-pocket medical costs... soared from a few hundred dollars a year to $7,000."

The story concludes:

Among high-deductible plans' advantages: For both companies and workers, premiums are substantially lower than for traditional coverage. Employers often use money saved on premiums to fund tax-free health savings accounts and similar arrangements to help workers pay for deductibles.

For severely ill patients or families coping with chronic illness, switching to high-deductible insurance can be the equivalent of a large pay cut.

"I've always hated the term consumer-driven health plan," said Oberlander, the health policy professor. "If we want to describe them accurately, they should be called employer-driven health plans for less comprehensive health insurance."