Deciding Deductibles – Nothing From Nothing Leaves Nothing
Insurance deductibles are a conundrum for both insurance consumers and health care policy makers. How large should your deductible be? What kind of policies should our government encourage? High deductibles reduce utilization and lower costs, but can result in treatment delays and financial hardship. This underlying tension is a key to the health care debate, any solution that limits costs will have negative impacts, choices will need to be made. Essentially, high deductible policies are a bet with the insurance company that your medical expenses will be less than the additional premium paid. Unfortunately, this bet requires the ability to see into the future, a talent few of us have mastered.
The health savings plans, designed to fill the gap with tax free savings, further complicates the issues involved. The LA times article decries how high deductible policies discourage patients from seeing doctors, which may in some (non-documented) cases delay treatment. The irony is that this result is precisely what high-deductible policies are designed to achieve. Low/no deductible policies encourage over-utilization, over-treatment, and raise costs by generating a consumer expectation to pay little or nothing for routine care. Medical cost escalation exists in part because people have become accustomed to such free care. Forcing people to pay for their own care will make doctors and drug companies more sensitive to costs. High deductible policies will act as a barrier to obtaining care, which is similar to the Kaiser method (June 30).
Roadblocks to obtaining medical care screen out self-limiting problems, and reduce expenses. There will be some missed early diagnoses, but little negative impact for most people. Nurses lines, online advice sites, and empowered patients could fill the gap now filled by useless doctor visits. I have a high deductible policy for my family. Being a physician, I am able to handle most of the small things myself(one advantage to being a doctor). However, the final irony I have discovered is that most policies pay so little for routine services that I ended up paying a large amount our of pocket anyway, deductibles may not matter that much after all.…