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High deductible plans are merely cost-shifting to patients; nothing more …but they also lower premiums

The high deductible health plan is the biggest scam since corporate wellness programs.

Why do we insist that Americans can be consumers of health care as if they were shopping for a new car? They can’t and they won’t with any significant impact on the cost of care. Time to move on🤦🏻‍♂️ The notion that requiring people to spend thousands of dollars on health care before any reimbursement is counterproductive and harmful to many low and moderate income Americans. It doesn’t cause them to shop, it causes them unnecessary stress.

We need reasonable deductibles, co-payments coupled with published fee schedules for reimbursement of all but hospital inpatient expenses. No more games with networks, negotiated fees, or participating physicians.


We need a system where patients have no reason to care about individual costs because the reimbursement and permitted utilization of health care is centrally controlled. In its simplistic form that’s a tightly run HMO. In its national form it’s the UKs National Health Service.

You cannot control the cost of health care (and, of course premiums or taxes) unless you control the prices for services and how all those services are used. And that’s the truth, the whole truth and nothing but the truth.


A study published last month in JAMA found that just a quarter of respondents with a high-deductible plan consulted a doctor about the price of a service, while only 14 percent actively compared prices.

6 replies »

  1. Quit your complaining. The problem isn’t “high” deductible, consumer-driven health plans. It is simply the cost of health coverage, utilization of services, and prescribing practices. We have gotten so used to health coverage picking up the vast majority of our spend. All you are seeing today is a more balanced approach between point of purchase cost sharing (deductibles) and point of enrollment cost sharing (premium).

    Four things:
    (1) First, from the 2017 Kaiser family foundation survey, the average general deductible for plans with a deductible went from $917 in 2010 to $1,505 in 2017. For large firms, HDHP options had a deductible of $1,995. So, the spread between all deductibles and so-called “high” deductibles is modest, and may be shrinking.
    (2) Second, high deductible plans without Health Savings Accounts are the majority of so-called “high” deductible plans. It is one thing to provide a tax favored savings account, it is another to just raise the deductible,
    (3) Third, “high” is a misnomer. In 2010, according to HHS, “high” was a $1,200 deductible. Today, “high” = $1,300. That is less than a 1% increase per year. For comparison, a $25 deductible in 1960, indexed for inflation (health expenditure inflation was 8.1% per year during the period 1960 – 2015), would be $2,120 in 2017.
    (4) Fourth, according to CMS, America’s out of pocket spending was only 11% of national health expenditures in recent years (2015 is last year available) – that is down from 52% in 1960!

    Yes, that is right, today, with our “massive”, “high” deductibles, Americans out of pocket spend is only one fifth of the medical expense our grandparents used to pay.


    • Jack you need to get out of the technical world and into the world of modest income folks trying to come up with a couple of thousand in health care dollars. I’m all for cost sharing, but that can be done with good co-payments and stop covering costs that should not be part of so-called insurance in the first place. Back in 1961 the only deductible we had was $100 applicable to major medical expenses for which there was a 20% coinsurance. If you adjust that today for SS age index you get $1190 and even for the medical CPI you only get $2024 in today’s dollars. Everyone I know and many of the Exchange plans have deductibles well in excess of that. Most people in effect are self funding their health care in one year. The problem is not the cost sharing but the way it’s applied in my opinion. If large deductibles are not an affordable issue why aren’t they used for Medicare? Certainly there are millions of younger Americans in the same income brackets who are asked to carry that deductible burden.


  2. The problem isn’t the hdhp. The problem is that you can’t easily compare prices. “Just a quarter of respondents asked doctors about cost….” That is a HUGE improvement vs ten years ago.
    Also, Health insurance SHOULD be catastrophic insurance. You do not use auto insurance to get an oil change. Why do we people use health INSURANCE for routine checkups?


    • Good point. Up you see Americans are accustomed to knowing that no amount of spending on health care is their responsibility. We have destroyed to entire concept of insurance.


    • I agree that you can’t compare prices. I once asked my specialist how he made any money. I showed him my statement from BC/BS for a post procedure follow up. His practice accepted about 1/3 the amount billed. Between BC/BS and my copay, they got $125. During my 30 minute visit, I interacted with 5 people of which 3 had medical degrees. Add in the overhead, billing people, IT people, utilities, office supplies, exam supplies, lawyers and accountants and even the janitors, you wonder how the practices made any money. My doctor said he doesn’t know either but the practice’s business administrator and accountants must have figured it out.

      The other thing is medical billing is by procedure or as I like to call it by the pill and by the stitch. Ask a doctor what he is going to find after he cuts you open and exactly how many stitch he’ll use, he will not tell you. You ask a good carpenter to open a wall he will only guess too. I had a window replaced and my quote was the starting price, the hourly rate, and cost for each type of board should they find rotted wood. Doctors are only going to give a starting price based on their average guess if at all. Each doctor is going to guess differently. There are no two exactly alike human models. People are not like cars. At least autobody shops know exactly what each part costs for each car model.

      I agree medical insurance is no longer insurance but payment plans. I believe that each doctor and hospital should list their lowest accept price and not bill at 3x what they will accept just to hope that they will get 1/3. Why is it that poor people who pay cash at the hospital get charged the most? The payment scale is inverted.


  3. I have a HDHP and I agree, it is an absolute joke. My deductible is outrageous. It is basically a catastrophic plan. I do have the HSA and have maximized the pre-tax contributions. Shopping around to compare costs is impossible when you do have an insurance plan- the clinics, doctors and other providers will not reveal the ‘true cost’ of the service as it is different for every plan. I will need to start by not revealing that I have insurance and ask what the cash cost is as I am essentially paying cash for the service anyway, not having met my deductible. I have been reading about SimpleCare and direct primary care and it looks like this may be the way for me to go moving forward.


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