High deductible health plans are insurance coverage where your deductible (amount that you have to pay before insurance kicks in) is over $1,300 per year for a single person or $2,600 for a family. We’ve written a lot about this kind of insurance coverage for 2 reasons.
1. Because a lot of people have it. About 40% of insured people are now on a “high deductible” plan.
2. The plans are supposed to improve the quality of care and reduce costs.
The plan is aimed at saving money in the long run. The idea being that you can keep the extra cash in your pocket now and be incentivized to shop around and be a good “consumer” when it comes time to spend your money.
But this theory doesn’t always work. A lot of people don’t like, want or know how to use their high deductible plan. A lot of people want a plan that affords them the flexibility of being able to go where they want when they want. And they don’t want to think about money when it’s time to see the doctor. While we’re all for taking an active role in your healthcare, the idea of that your high deductible plan will be enough encouragement is not always true.
Let’s look at why high deductible plans don’t work
- People don’t know how to be consumers – Nobody teaches you how you’re supposed to go to the doctor. There are no college courses on being a good “healthcare consumer” or on how to pay your medical bills (seriously, it’s a lot more complicated than you think).
- People don’t know why they should care – most of us are brought up with the mentality that “the doctor is always right“. It’s fine to rely on the doctor’s expertise, but the patient does play an important role. And as a patient, you can’t be entirely passive.
What does all of this mean? It means that people generally do not shop around, price compare or think about the quality of care that they’re getting. People have been conditioned to ride the conveyor belt of healthcare, and take what comes to them.
How can we make a high deductible health plan work?
Not all high deductible plans are unsuccessful. Far from it.
If a company introduces a high deductible plan with sufficient support in place, costs can be reduced. Employees will also receive better and more comprehensive care. How exactly can you achieve this?
- Educate your employees on the “levels of care” – It’s important to know where to get care when you need it. Don’t go to the emergency room for a cold.
- Get a telemedicine company – You can save serious money and have an extremely convenient doctors appointment. Telemedicine is so underutilized, its one of the first things that I always recommend.
- Talk about 2nd opinions – People need to know that they should get a second opinion, especially if they’re getting treated for something serious. Before getting extensive care it pays to get a third party to verify the condition. There are ample resources out there for getting a cost effective second look.
- Price compare for prescriptions – This is a very easy one. Most people just get their medications filled at their regular pharmacy. This is a seriously lost opportunity to save some cash. You could be paying many times more than you should be.