HDHP’s – Long Term Solution or Short Term Fix?

High Deductible Health Plans Are Leaving Physical and Emotional Hardships

The concept of high deductible health insurance is incredible. In fact, it’s been one of my favorite things in the health insurance industry. But I am starting to have some concerns.

Higher deductibles put more financial pressure on the end user, meaning the consumer must be more aware of their health and spending.

Every decision you make has a cost.

Shopping for healthcare, not just insurance

In this scenario, we are talking about the well being of your employees. The target is for an employee to be aware of their health. The healthier an employee, the less costly their care should be. If they are physically healthier, their checkbook will be as well.

If implemented successfully, HDHPs will make consumers more aware of how their dollars are spent on healthcare. If avoiding healthcare means less money in our bank accounts in the long term, we should be more aware of what is causing this scenario. The end user should be looking for the best deals by shopping around to several participating providers in their area. Having services performed at the lowest possible price means there is less coming out of their pocket.

Why pay more if you don’t have to?

Understanding costs and plans

In today’s health insurance market, costs are continuing to rise. Therefore, several other pieces are facing major impact. There are shifts in the consumer premiums, deductibles, and out-of-pocket expenses. Of course, all rising. This equals more responsibility to the end user.

We are supposed to be utilizing the mandated preventative care included in our policies at no out of pocket expense. Is this something you are taking advantage of? How about your employees?

We need to know what is going on with our bodies. The earlier we catch the problems, the more controlled the cost will become. Sounds simple enough, right?

In reality, there are extremely negative impacts of these high deductible plans. Patients are going without care because they cannot handle the additional expense. Higher premiums plus higher cost to reach benefits equals patients ignoring the minor physical and mental pains. This is resulting in issues that are significantly more expensive in the future.

How dead do you have to be to meet your deductible?

Care is being avoided. It is very difficult to support a $5,000 deductible, right? This is what I am hearing from the employers and their employees we work with.

Another concern with high deductible health plans is the hardship it is leaving the provider. Think about it…One that is exposed to a $5,000 deductible, goes to receive emergency care but can’t foot that bill. This leaves the provider on the hook for longer than normal time. How will the provider respond if this becomes a norm?

I am guessing this will impact the cost of care over time, in a negative way. Once again, the cost will be shifted to the end user. It could also create an issue for access to care.

Is avoiding care cheaper? No, I will argue that avoiding healthcare is more expensive in the long run.   Instead of getting your oil changed in your car, you avoid it. Your engine blows…Now you are out a new engine. Much more money than changing your oil, several times! Are you seeing the picture now?

Typically, if you pay for quality treatments up front, it will be cheaper in the long run. This avoids repetitive follow-ups, need for a procedure to be redone, or the need for extended therapy.

Patients struggle to handle the additional expense of the more quality procedure up front. Therefore, the consumer is faced with lower quality care or no care at all.

The other major issue with these major changes in the health plans is it is impacting hospital systems’ finances. They are also creating financial hardship on the consumer and the anxiety that comes along with this issue.

Moving forward, here are a few questions you can ask yourself prior to service:

• What is this procedure going to cost?
• Do you know this prior to having the procedure done?
• What is the neighboring provider charging for the same service?
• What is the cost of not having care?
• Is it better to spend a smaller amount of money now, or a much larger amount later? Be realistic
• How is this impacting other people in my community?

I am not saying that HDHPs are bad, nor am I saying they are good. The situation must first be evaluated. Don’t run off and cancel these plans or run to put one in. Talk to a professional about evaluating the proper fit for your culture.

It is important to discuss these topics with a professional, and ask for help. Navigating health care is more difficult than it has ever been in the past, and will only continue to become more difficult.

Before implementing, consider your workforce, consider how effective your communication is to educate your workforce on how to use them correctly. Develop a plan for successful implementation. A plan will greater increase your odds for obtaining your goals. You will need a timeline, resources, the right people, proper culture, time, and patience.

In this post, I have not discussed the possible partnerships with other accounts such as Health Savings Accounts, Health Reimbursement Accounts, GAP coverage, Flexible Spending Accounts, etc.  I will discuss those in particular in other blog posts.  But don’t forget about them, and the potential tax advantages for employers and employees!

Transparency & Education are key to successful implementation.

As an employer, do you find HDHPs successful or a disaster?

Are they a long term solution or a short term fix?

I would love to see some remarks in the comments section below!

 

When thinking about major benefit decisions, think of Employee Benefit Consultants, Inc.. Taylor would be happy to help, as he is a certified professional through the National Association of Health Underwriters with HDHP’s.