Even as Obamacare lowers premiums, high-deductible plans pose burden for some

Last week, the government released new data extolling the affordability of Obamacare premiums for those selecting plans with tax credits.

Media coverage such as this piece described the health insurance plans as “dirt cheap” for those taking advantage of tax credits. And Sylvia Burwell, the Health and Human Services secretary, said in a release: “When there is choice and competition, everyone benefits.”

But even as many consumers are benefiting from the new health landscape and cheaper premiums, some advocates are concerned about the flipside of the low-premium coin: high deductibles, which they say can burden patients with costly medical bills and stick hospitals with unpaid care.

“These high-deductible plans make health access disparities worse, putting care out of reach for even more low-income people of color and immigrants because of the huge economic barriers to care,” said Diane Sosne, a nurse and the president of SEIU Healthcare 1199NW. The union represents 26,000 nurses and health care workers in Washington state.

High-deductible plans, which have grown in recent years, are often touted for encouraging patients to make better health spending decisions, since they shoulder much of the initial costs, except for some preventative care. They are typically coupled with a health savings account (HSA).

While monthly premiums are usually lower, the plans can be costly for consumers and hospitals. When patients don’t understand their plans, or require pricey care, they can end up facing bills they aren’t able to pay, as reported in this piece. Another criticism is that patients may avoid care at the onset of a condition, ultimately leading to much costlier emergency room visits down the line.

A 2013 Kaiser Family Foundation survey found more and more workers are enrolling in high-deductible plans linked to a health savings account. And this 2013 annual survey from Towers Watson and the National Business Group on Health found that 66 percent of companies with 1,000 employees or more offered at least one high-deductible option – a figure they projected to climb significantly.

As healthcare costs rise, many industry experts anticipate further growth in these plans, which help employers reduce their share of the spending. (This article details research that found these plans can reduce employer spending, from cost savings in lab services to presciption drug spending.)

Last year, a Washington SEIU chapter was so concerned about the rise in plans with high deductibles that they organized a strike in protest.

The union said a number of hospitals where their members work have eliminated PPO plans and replaced them with high-deductible plans. Others now offer a high-deductible option as the core plan with PPOs as an upgrade, adding additional monthly costs for the employee.

The union’s health care employers frequently cite uncertainty about the Affordable Care Act’s effect on medical reimbursements as part of the motivation for the plan changes, said Sosne, the union president. Some hospital employers use the ACA’s potential cuts in Medicare spending to justify their move to health insurance plans that shift more costs to employees, she said.

While some of their members, such as nurses, might be able to afford a $2,000 or $2,500 deductible, that cost can be a significant burden for a hospital clerk, janitor or other lower-wage service worker. Some members have racked up credit card debt to pay those fees, according to the union.

Even worse, some misunderstand the high-deductible plans’ benefits and forgo essential primary care such as mammograms, or well visits.

“Even though it’s completely covered, members are skipping needed screenings and immunizations because it’s not clear to them that the deductible doesn’t apply or because they fear the cost should something be discovered,” Sosne said. “This could have a devastating impact on health.”

Photo by ProgressOhio via Flickr.