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High-Deductible Health Plans, Gamble For Some, On The Rise

Posted: July 28, 2013

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With the implementation of the Affordable Care Act looming, many employers are switching from traditional health care plans to what are known as high-deductible plans. These plans have lower premiums, but put patients on the hook for thousands in out-of-pocket expenses.

Near the end of last year, a big finance company in Charlotte, N.C., was doing what a lot of other businesses have been doing recently: switching up their health care offerings.

"Everything was changing, and we would only be offered two choices and each were a high-deductible plan," says Marty Metzl, whose husband works for the company.

High-deductible plans are the increasingly common kind of health insurance that have cheaper premiums than traditional plans, but they put you on the hook for thousands of dollars in out-of-pocket costs before the insurance kicks in.

According to the Kaiser Family Foundation, back in 2006, just 10 percent of Americans who get health insurance through their employers had a high-deductible plan. Today, more than a third have them, and that percentage is growing daily.

The trend, which could increase with implementation of the Affordable Care Act, has some doing the math before seeking care.

What's It Going To Cost?

For the Metzls, the options were deductibles of $3,000 or $4,500.

"After much angst and thinking and talking, we decided to choose the higher deductible plan," Metzl tells NPR's Jacki Lyden. "It really just felt like we were rolling the dice and gambling that none of us would get sick or have any catastrophic accident in 2013."

That gamble didn't pay off. Late one night, Metzl was working at home when she heard her husband yell for her to come to the bathroom. Her son had hit his head. She says that even though blood was running from his head and down his back, her thoughts quickly went to the family's insurance.

"It was like something out of a horror movie, and I was standing there thinking — instead of, 'Oh my gosh what happened to my son' — I'm thinking, 'Oh my gosh, how much is this going to cost if we have to take him to the ER at 11 at night?' " Metzl says. "I mean, I was horrified that that thought even came into my mind, but that's where my brain went."

The Metzls decided not to take their son in. Instead, they patched him up as best they could and sent him back to bed.

Making The Decision

Frank Wharam, a physician and researcher at Harvard Medical School, has been studying high-deductible plans since they first started appearing in the early 2000s. The reasons for the upswing are twofold, he says. First, there's the ever-present pressure on employers to save money. Plus, he says, the Affordable Care Act is driving up the numbers.

"It's going to be the result of the fact that there are mandates for people to be insured, so more and more people will be required to purchase insurance. And high-deductible health plans have the lowest upfront costs," Wharam says.

That's precisely the reason Brian Updyke has a high-deductible health plan. He's a freelance television producer, a job that makes finding health insurance especially difficult.

"They don't provide benefits. You're switching jobs every eight weeks, 10 weeks," he says. In the end, he bought his own plan — the cheapest on — with a $40 monthly premium and a deductible of $4,500.

High-deductible plans like his exempt a lot of preventative care — like regular checkups and cancer screening — from that deductible because of provisions in the Affordable Care Act.

Change In Behavior

For the first couple years, Updyke went to his annual doctor's appointment and that was that. But in 2009, he started having a little stomach pain and didn't rush to the hospital for help.

"I kind of went for a few days because I sort of was thinking it wasn't that painful," Updyke says; he thought it might be an ulcer or indigestion. But when he finally did get to the hospital, it turned out his appendix had ruptured.

A few days after surgery, someone brought him a laptop so that he could check on his health benefits — he didn't know how much treatment his insurance covered.

Katy Kozhimannil studies high-deductible plans at the University of Minnesota. She says the kind of confusion Updyke experienced is common — and so was his trepidation about visiting the emergency room, according to research.

"After transitioning to a high-deductible plan, men reduced use of the emergency room for all different kinds of visits and conditions," says Kozhimannil. That's different from the changes her studies have found among women; they tend to reduce their medical visits only for low-severity symptoms.

"It's possible that men are forgoing care because of those cost issues," says Kozhimannil.

Talk With Your Doctor

Wharam, who spends time every week in a clinic seeing patients, says that high-deductible health plans make it all the more important to figure out, with your doctor, the value of medical services.

"Some services are so important and valuable that no matter what the cost, the patient and physician should figure out a way that those services can be obtained," the Harvard physician says. That could be something like CAT scans to screen for colon cancer in high-risk individuals. Wharam agrees that their $1,500 price tag is high, but he says it's a cost worth incurring, unlike, for example, the cost of an MRI for lower back pain that is likely due to simple sprain.

Wharam says he's noticed a gradual uptick in the number of patients asking questions about prices and value.

"It's an interesting challenge because physicians don't know that. They don't tend to have a screen in front of them or the data in front of them to say how much a service costs," he says.

Finding The Positive

Ironically, while these high-deductible plans have some second-guessing their trips to the hospital, others have found ways to make the system work for them. Updyke, the Californian with the burst appendix, says that after he paid up to the level of his $4,500 deductible, he could get a lot more care for free.

"I had a small, benign cyst that was on my wrist. I had to have the doctor look at it, they were like, 'There's really nothing there, you can get it out if you want to, but it's not an emergency,' " he says. But later that year, he got it removed anyway.

As the Obamacare mandate kicks in this January, more and more people are likely to find themselves with high-deductible plans. And the White House is hoping Updyke is not alone in his satisfaction.

Copyright 2014 NPR. To see more, visit http://www.npr.org/.

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