Insurance surprises ahead
March 28, 2015
Earlier this year, The Seattle Times ran an article about patients being surprised by the out-of-pocket costs associated with a high-deductible plan. The article starts off with the story of a family that initially rejoiced over a low monthly premium of around $240 (compared to the earlier $800 monthly premium that they had been paying). The story takes an unfortunate turn when a family member becomes unexpectedly ill and needs to pay out-of-pocket until the deductible and out-of-pocket limit are reached. The article implies that the family was surprised, and includes some people's disapproval of high-deductible health plans.
A low initial price (in terms of monthly premium) will undoubtedly seem attractive to many families. Still, a 70% drop in price (from $800 to $240) should highlight that the insurance product is not going to be the same. Fortunately for this family, the math seems to work out so they don't come far behind by going with the high-deductible plan. The difference in monthly premiums is $560, so the total annual savings would be $6,720. That amount is greater than the out-of-pocket maximum of $6,600. That is, even if this family paid the entire out-of-pocket limit for the unexpected care, they still end up paying less than what they would have if they just purchased their previous more expensive insurance. This won't be true for all families; in particular, the difference in premiums for this family is likely higher than what many other families would experience. However, families with high-deductible plans also qualify for a health savings account, which saves on taxes.
All in all, there remains a transition for many families who will realize that whatever plan they are on might not be the best one for their circumstances. Some of it might just be learning about the insurance offerings themselves (e.g. concepts such as deductibles and out-of-pocket maximums); some of it will be related to understanding tax consequences. Unfortunately, some of it will also be patients finding out how much certain procedures or medications cost because those numbers were not readily available earlier. As noted at the end of the article, though, high-deductible plans will continue to be popular because of their cost.