My family has been enrolled in a qualified high-deductible health plan (HDHP) for the past eight years. During each calendar year, we are responsible for paying the first $10,000 of our covered health expenses before the insurance company assumes paying the remainder at 100 percent. As a ‘qualified’ plan, some preventive services are automatically covered by the insurance company without my family having to satisfy the deductible. In addition, to help offset the high deductible each year on a pre-tax basis, we have a health savings account (HSA) that we fund annually up to inflation-adjusted contribution limits – which is $6,750 for 2017. About one-third of American workers now have HDHPs.
HDHPs and HSAs, collectively known as consumer-driven health plans (CDHPs), are considered to be important components in most every Republican replacement plan that is being bantered around in the public – mostly used as talking points to control future health costs. CDHPs, we learn, allow Americans to become better ‘consumers,’ rather than merely ‘users’ of care. Advocates also believe that by having more ‘skin in the game,’ we become better consumers and are not as inclined to utilize more care than necessary. Finally, patients with high-deductible plans will scrutinize costs by reviewing alternative care options within the marketplace. Doing so will ultimately squeeze costs to becoming more affordable.
When allowed, market-driven approaches can work quite successfully. Look at the electronics world in which we live. We are paying dirt-cheap prices for products that have higher quality components with a myriad of enhancements that were not even on the drawing board over 40 years ago. For example, in 1970, a new 25-inch diagonal Cinema Screen Color Television (with remote) cost $739.95. At that time, this was the largest screen available in TVs. Today, you can visit the nearest store (or go online) and purchase a 32-inch LCD high-definition TV with numerous enhancements for as little as $150.00.
Today, thanks to a robust market that allows for transparency on price and quality, any motivated consumer can spend hours analyzing innumerable televisions that can be purchased through legions of vendors. But this can only happen when the market allows buyers to discern both price and quality from many sellers to determine the value they wish to pay for.
My wife, Deb, is perhaps one of the savviest consumers I know. The research she undertakes to buy any particular household item is legendary. In fact, I recently observed Deb explaining the merits of a particular wood flooring product to a representative who SELLS wood flooring products! At the end of Deb’s informal ‘seminar,’ the comment made by the flooring professional was simply, “We need to hire YOU!”
But when it comes to being a savvy healthcare consumer, even when armed with a CDHP, Deb’s enthusiasm to discern value diminishes greatly. In addition to navigating through providers for her own needs, Deb is often involved with assisting our two college-age daughters with doctor appointments, prescription drugs, and many other coordination efforts that sometimes appear to be futile. One daughter has been recently diagnosed with idiopathic hypersomnia, a sleep disorder in which a person is excessively sleepy during the day. Unfortunately, there is no clear cause for this disorder, and little is known about effective treatments. As parents, we can only hope to do our best at finding providers who listen, demonstrate empathy, and act as professional surrogates in making sense out of the senseless.
Deb has never been a big fan of our CDHP, largely due to the lack of price and quality information available that would allow her to perform her consumer magic. If any family could navigate through the healthcare system, you would think that an insurance/healthcare research professional and his attorney-wife would be successful. In our existing healthcare world, however, any successes we have are usually small and short-lived. It is extremely hard to be a healthcare consumer in Iowa – or any other state, for that matter. Admittedly, healthcare is not a homogenous commodity, nor is it ubiquitous. But even so, good luck figuring out how much a visit to a specialist or receiving a minor surgery will cost. The insurance tools available to help navigate our care are, at best, similar to playing a game of horseshoes – “close enough” is the best we can hope for. In healthcare, having precise data to make important life decisions remains only a hope.
For the short term, I’m not as optimistic about high deductible health plans that are coupled with health savings accounts. Afterall, delayed care is the most often-considered tool that we have – which may or may not be a good thing. Long term, we will just have to see if our healthcare system can begin to resemble a true market-driven world that allows for innovation and make the Debs in our world happier and more consumer-savvy.
In the meantime, we will need to be content and enjoy our wood floor and high-definition television.
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