High-deductible health plans are killing us — financially and clinically

You remember the promise of high-deductible health plans. Lower insurance premiums coupled with unheard of tax advantages for health savings accounts. The freedom and power to shop for healthcare services like a consumer would for just about anything else. They were going to solve the problems of healthcare access and affordability in the United States.

As an employer or an adviser who serves them, you know the brutal truth: the promise hasn’t been kept. In fact, you could argue that high-deductible plans have made matters worse, especially for the most vulnerable.

"High deductible health plans widen health disparities,” said Dr. Michelle Lin, assistant professor at Mount Sinai Health System’s Institute for Health Equity Research. “They are associated with reductions in both urgent and non-urgent emergency visits among low socioeconomic status populations, with increased subsequent hospitalizations, and delays in access to care among Black cancer survivors."

Read more: Don’t let medical bills break your employees’ retirement savings

Simply glance at the toll high deductibles have taken on our economic well-being and overall health. You’ll reach one logical conclusion: It’s time for another way.

Deductibles are skyrocketing. The average annual deductible for single-employee coverage went up 52% between 2013 and 2018, from $724 to $1,100. Deductibles for family coverage rose 45% over the same span, from $1,534 in 2013 to $2,225 in 2018.

This is not a narrow slice of society. A full 82% of large employers offer an HSA-eligible high-deductible option and enrollment has climbed to 38% in 2020 from just 13% in 2011.

Let’s be honest: If you have a health plan with an $11,000 family deductible, you are functionally uninsured. Consider that most Americans have about $400 saved. That’s a $10,600 gap that only the wealthiest among us have socked away. No wonder a full one-third of the money raised on GoFundMe is for medical expenses, the organization’s largest single category.

Flexible spending accounts (FSAs) and health savings accounts (HSAs) can help, but only if you have the extra money to put toward one; exactly what most working Americans living paycheck to paycheck do not have. Fully 61% have no money saved for healthcare expenses. Another 64% report avoiding or delaying care in the last year due to expected costs. And of that 64%, 23% avoided follow-up care after an inpatient hospital stay.

Read more: Benefitfocus reveals the benefits employees are using the most during COVID

These trends have hit employees hard. Study after study links high deductibles to less engagement with healthcare, with significant reductions in preventive care, office visits and medication adherence. Forty-four percent of patients surveyed said they would not receive medical care, even if it would put their health at risk, if they knew their out-of-pocket expenses would be more than $500.

According to a piece in Health Affairs, women with breast cancer who switched to high-deductible health plans before being diagnosed experienced delays in every aspect of the care process, regardless of income. (The delays were longer the lower the income.) In addition, rheumatologists report that people often skip therapy treatments at the beginning of the year, when deductibles have not been met, with no correlation to severity of symptoms.

Read more: Voya research shows employees are biased toward HDHPs

There is a better way. It is a more logical path that leads to better outcomes, both financial and clinical, for employers, employees and providers. It starts with employers and their advisers demanding that insurers and third-party administrators offer up ideas and solutions that move away from higher and higher deductibles and the negative impacts they bring with them.

Instead, employer-sponsored health plans should incentivize the right kind of behavior and engagement with healthcare providers. Plan design can have a huge impact on member behavior change by offering such features as networks anchored around value-based care; truly free primary care (not just wellness checks and screenings) via a selected or assigned primary care team; no deductibles or coinsurance; and simple and easy to understand copays.

What will this behavior change bring about? Increased primary care usage and all of its well-documented benefits; more appropriate specialist utilization; better medication compliance; and overall healthier employees and families who view their health plan as a true benefit that is improving the quality of their, and their loved ones, lives.