Increasing enrollment in high-deductible plans
November 15, 2014
For a long time, patients did not have to worry about medical costs, as long as their insurance plan was accepted by their health care providers. This peace of mind turned out to be a huge problem: since patients had no incentive to care about costs, they didn't (this problem is known as the third-party payer problem). Patients might as well have always demanded the best, even if that meant providers who charged the most, equipment that was too costly for its intended function, or unnecessary tests. Along with other factors, this tendency drove health insurance premiums higher and higher. Health insurance premiums kept rising, and people started saying that the rises were unsustainable. Different approaches have been tried over the years, and now, patients are increasingly responsible for a share of their medical costs. This trend gets at one of the underlying causes for increases in health premiums.
An interesting note is that people shopping on exchanges seem to overwhelmingly prefer high-deductible/low-premium plans. The rate of adoption of these plans is significantly lower in the employer market, although still quite sizable. This difference is likely due to people shopping on exchanges are paying with their own money directly. As workers realize that rising health insurance premiums comes at the expense of their take-home pay, I would expect the enrollment in these plans to rise further in the employer market.