CMS provides some perspective for the "High Deductible!" panic

While most of the fuss & bother this year (including by myself) has been over how much premium rates are increasing on this policy or that one, the other major concern making the rounds of late has been the High Deductible syndrome. As Robert Pear noted in a much-discussed story over the weekend:

But for many consumers, the sticker shock is coming not on the front end, when they purchase the plans, but on the back end when they get sick: sky-high deductibles that are leaving some newly insured feeling nearly as vulnerable as they were before they had coverage.

“The deductible, $3,000 a year, makes it impossible to actually go to the doctor,” said David R. Reines, 60, of Jefferson Township, N.J., a former hardware salesman with chronic knee pain. “We have insurance, but can’t afford to use it.”

In many states, more than half the plans offered for sale through HealthCare.gov, the federal online marketplace, have a deductible of $3,000 or more, a New York Times review has found. Those deductibles are causing concern among Democrats — and some Republican detractors of the health law, who once pushed high-deductible health plans in the belief that consumers would be more cost-conscious if they had more of a financial stake or skin in the game.

“We could not afford the deductible,” said Kevin Fanning, 59, who lives in North Texas, near Wichita Falls. “Basically I was paying for insurance I could not afford to use.”

Andrew Sprung of Xpostfactoid and Kevin Drum of Mother Jones have both pointed out some serious mitigating factors which Pear glossed over, most notably that for anyone earning less than 250% of the Federal Poverty Line (around $60K for a family of 4), additional financial aid can slash the deductible/co-pay/coinsurance costs down tremendously.

However, it looks like the CMS division of the HHS Dept. is feeling the heat on the High Deductible brouhaha, as they just posted an extensive blog entry which makes some very important points about the deductible situation. While it is still a legitimate issue, some of it is mitigated by the fact that:

  • All Marketplace plans cover recommended preventive services without a deductible. Services like cancer screening, immunizations, and well-child visits will always be covered without having to pay your deductible, any co-pay, or other costs to you.
  • Many other health services are often covered without a deductible. Many health insurance plans provide some benefits before you meet the deductible. In those plans, you may be able to visit your primary care doctor or fill a prescription for a generic drug and only pay a copay – a small fixed amount you pay at time of service. Even specialist visits, mental health outpatient services, and brand name drugs are often covered with no deductible, although you will still be responsible for copayment or coinsurance.
  • Look to see what your plan covers without a deductible. Plans differ in what they cover, so when you find a plan that you’re interested in, click on the plan on gov and look at the “costs for medical care. ” That section will describe which services have a deductible and which don’t. Another way to get a more detailed view is to click on a plan’s “Summary of Benefits and Coverage.” There, you’ll see a detailed explanation of how the plan deductible applies to different services, and you can see examples for certain kinds of care.

These first three points are the most relevant counterarguments to the "deductibles are too high!" claims. Lots of people (such as the guy quoted in the NY Times story) seem to be under the impression that their policies don't cover bupkis until the deductible is met, but the truth is that plenty of important services are either free or only require the co-pay.

  • Consider services covered without a deductible along with your monthly premiums, deductible, and other out of pocket costs when choosing the plan that is right for you. When you choose a health insurance plan, it’s important to understand what your insurance company covers without requiring you to pay your deductible. Then you can decide how to trade off monthly premiums, out of pocket costs including the plan’s deductible, and the set of services covered without a deductible. For instance, do you want a plan with lower monthly premiums and a higher deductible, or one with a higher monthly premium and a lower deductible? You can use our Out of Pocket Cost feature to estimate what your premiums, deductibles and co-pays may be for the year, based on the number of times you go to the doctor or get a prescription filled, to get a better understanding of your total out of pocket costs.

And, of course, they do mention the Silver Plan factor as well, although I still think HC.gov should default to Silver plans when you actually go window shopping:

  • Silver plans can save you more. If you qualify for cost sharing reductions – as most consumers who sign up for Marketplace policies do – you can save more. A family of four with income below $60,625 can qualify for additional savings with lower copays, a lower deductible, and more services covered with no deductible at all. This financial assistance is only available if you purchase a Silver plan; so while a Silver plan may have monthly premiums that are higher than a Bronze plan’s, be sure to consider your total costs. If you qualify, your maximum annual out-of-pocket costs – counting your deductible and all payments after you meet the deductible – could be lowered by thousands of dollars, and your deductible could be lowered as well. Check to see if you qualify for these savings.