New Survey Shows High-Deductible Health Plans Not Satisfying Customers

Vulnerability to High Medical Bills Cited

New Survey Shows High-Deductible Health Plans Not Satisfying Customers
August 17, 2015

High deductible health plans (HDHPs) are health insurance plans that try to strike a balance between affordability and usability. With an HDHP, you keep your premiums down by accepting a higher annual deductible, defined as $1,500 or greater for individual coverage and $3,000 or more for a family. However, a recent study by the Kaiser Family Foundation (KFF) implies that those with HDHPs are less satisfied than other health care consumers are and are questioning the value of an HDHP.

The discrepancy relates to the overall rating as well as the value. When asked how they would rate their overall health insurance coverage, 66% of HDHP holders rated their care as either "good" (53%) or "excellent" (13%), compared to "not so good" (17%) or "poor" (12%). In contrast, 85% of those with lower-deductible plans rated their coverage “good” or “excellent.” When asked whether their plan provides value for the money, the good or excellent responses drop to 37% for HDHP holders and 68% for those with lower deductibles.

That should be a significant concern for insurers, since according to the KFF survey, 40% of the non-group insurance enrollees have high deductibles. (In a disturbing side note, another 17% were unsure of their deductible, so it's possible that HDHP numbers are even higher.)

Those with HDHPs tend to have higher incomes, and in general are eligible for fewer subsidies through the exchanges. 37% of KFF survey respondents with HDHPs had incomes below 250% of the Federal Poverty Line (FPL) of $11,770 for an individual and $15,930 for a two-person household in 2015. However, 64% of respondents with lower deductible plans fell into that lower-income category. KFF concluded that only 36% of HDHP holders were likely to receive a tax credit, as compared to 56% of lower-deductible plan holders.

A higher income should be able to withstand higher deductible costs — so what's the problem? It appears that too many people either do not have the money in their account to cover the higher deductible or simply refuse to use it and consider their insurance as only being for catastrophic conditions beyond their deductible. This explains why survey respondents with HDHPs report feeling more vulnerable to high medical bills by a 55%-22% margin over those with lower deductible plans.

When asked about a hypothetical medical bill of $500 or $1500 and how they would pay for the bill, a surprising number of HDHP respondents said they could not pay the bill at all, even though it's within their deductible. 15% could not pay a $1500 bill, and 8% could not even pay $500. An even larger group would borrow to pay the bill, mostly via credit cards, with 43% borrowing to pay a $1500 bill and 28% borrowing to pay $500.

The KFF survey did not explore one interesting aspect — the presence or absence of Health Savings Accounts (HSAs). HDHP plans are required in order to have an HSA, and it would be interesting to know if the benefits of a HSA make a HDHP more desirable, or if there is an income split associated with HSAs.

In the end, income does not seem to matter since both higher and lower income individuals give lower ratings to HDHPs. It is more about the premiums. People seem to be choosing a plan not because it finds the best balance between premiums and protection from high medical bills, but because it offers the most affordable premium option available to them, wherever they are on the income scale.

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Zanna | 08.17.15 @ 18:25
Even with a health savings account if someone needs to meet a high deductible and a huge unexpected medical bill, it can be overwhelming. In the current economy too many people are forced to choose between saving money and paying their bills, and putting money aside for an unexpected expense of any kind just isn't feasible.
Britt | 08.17.15 @ 18:26
Well duh. It makes things more complicated and messes with people, especially when they can't really afford to be able to pay these types of obscene costs just for healthcare.
trish | 08.17.15 @ 18:27
I have learned that as long as you pay something towards your bill every month, you can take as long as you need to, to pay the debt off. Unexpected illnesses are something you can think you plan for, until the bills arrive. While I would never consider not paying off my debt, I would do it in a fashion that will satisfy the debt, without putting me in a position of not being able to put food on the table, or heat the house during the winter. As long as you set up a plan with the doctor/hospital, you will be fine.
Daniel | 08.17.15 @ 18:28
Medical costs are outrageous even with health care it can easily burn through savings. I try to have emergency funds available just hoping they will never be needed.
Meredith L | 08.17.15 @ 18:29
Sadly, my husband's job will be coming up on medical insurance enrollment and I know a big chunk is going to be taken out - money we cannot afford to cover participation. Add a deductible and something critical in my household is not getting paid. Unfortunately, I would be in the the group where I sincerely want to pay it but it's going to be way, way back on the back burner. On a side note: my aunt felt the same to where she feared going to the doctor....and it cost her her life. She died from a treatable cancer because the whole medical billing, cost, deductible scared her because she wanted to do the right thing and not owe anyone.
Alec | 08.17.15 @ 18:35
Even with the AHA, health insurance is still far from affordable for most families. It doesn't seem to take into account that although a family may have an income of X, that there are a lot of variables that decide how much "extra" money they have a month. Bills, rent and food may cost about the same every month but gas doesn't always and there are always unavoidable unexpected expenses that come before healthcare costs you may or may not need soon.
Erin | 08.17.15 @ 18:37
HSAs have a risk of their own. We tried it one year and had to put a certain amount of money into it, but then we had to basically use it or lose it. For a healthy family, it just wasn't worth having. We would have been better off saving that money in a rainy day fund so we could spend it how we needed to and not how insurance dictated.
Chrisitna | 08.17.15 @ 18:42
My husband's company offers a high deductible plan with a health savings account, and we switched to it because it pays 80/20 instead of 75/25 that we had before - however, we didn't read the fine print well enough apparently, because there are now no longer $30 doctor visit copays. Instead we have to pay for the visit at 80/20 and it applies toward that high deductible. It does still provide free well visits, but if the doctor doesn't code those right, then you end up being charged for that also! I'm ready to switch back to the other, less complicated plan when his open enrollment comes around!
Elaine | 08.17.15 @ 18:50
It comes down to what is the most affordable to me at the moment. After going years without coverage I felt it was my only option. I am one of those who just believes nothing serious happens to make a medical debt.
Nancy | 08.17.15 @ 18:56
Our health care system is still unaffordable for most Americans. When I get an unexpected medical bill it is put into the "as soon as I can pile". It's a shame that so many of us can't afford to be sick.
Carla | 08.17.15 @ 18:59
Medical costs are unexpected and hard to plan for especially when there is no extra money to set aside for such costs. The medical bills we have now are being paid a little at a time. I pay as much as I can each month in hopes that I can get it paid in full as soon as possible.
Apryl | 08.17.15 @ 19:27
I'm opting to avoid the doctors at all costs. It just can't be afforded.
Crystal | 08.17.15 @ 19:42
I had one once and it was horrible. I'll take the lower deductible any day of the week.
gracie | 08.17.15 @ 19:53
I think it's a rough choice when you have to choose to scale back as far as you can on healthcare because you are already stretched to the limit trying to juggle monthly bills. If you aren't sick much the HDHP sounds like an ok fit. The trouble is if something catastrophic happens many don't have the high deductible at hand to pay for it. It's nice to think that just paying a small amount will tide you over on a bill but a serious life threatening illness can bankrupt many families. Paying just what can be afforded for care is a bill that will follow them for the rest of their life.
Kamie | 08.17.15 @ 19:57
No matter what insurance someone has, healthcare is not affordable, or at least for me, or many that I know. I would never be able to meet a deductible in order for this to work.
Bobbie | 08.17.15 @ 20:12
I've only had some minor medical bills pop up with emergencies, so thankfully I can just whip out a credit card and pay if off over the next couple of months. We opted for a lower premium given how rarely we visit the Dr's
Beverly | 08.17.15 @ 20:28
Higher deductibles only work if they are something you can afford. Unfortunately, most people live beyond their means already so there is no room for even paying the lowest deductible........mostly because people always think "it will never happen to me". Unfortunately, the "Affordable" Care Act (aka Obamacare) isn't affordable for most people, certainly not any more affordable than what was being offered already. Health Savings Accounts are nice, but they are usually "use it or lose it" so the "savings' part is not really there.
Chelsey | 08.17.15 @ 20:29
This is one of the dilemmas I face when choosing healthcare plans for my family. We don't really use healthcare unless someone is really sick or has been injured. It's super difficult when I have to choose between paying for health insurance we may need, or things I know we need right now. I shouldn't have to choose between saving money or paying for health insurance.
Angie | 08.17.15 @ 20:36
I recently commented on a similar topic - we briefly enrolled in the state subsidized insurance - our portion was $500 a month for the premium and the deductible was almost $4000 per person. I knew my job was going to end a few months in advance, and so we dropped the insurance to save the amount of premium we were having to pay. I'm hoping to pick up work again soon, but I'm already dreading the insurance fiasco.
Steffanie | 08.17.15 @ 20:49
We experienced an unexpected medical bill last fall (my husband's appendix ruptured). We found that many places were willing to work with us, but they wanted things paid in full.
Crystal | 08.17.15 @ 21:05
My employer offers a pretax HSA and that helps with nay unexpected medical bills.
Victor | 08.17.15 @ 21:06
The best thing to do is take a look at other health plans and take the best for you
Jane | 08.17.15 @ 21:22
A high deductible health plan is probably chosen by a lot of people because it reduces the premium. But if the times comes when they need expensive medical help, they may not have the funds to pay their high deductible. It's sad :(
Andrea | 08.17.15 @ 21:51
View all possible options that best work for you. I know of someone who works very hard to find the best for your family or individual.
Sara | 08.17.15 @ 22:08
It is sad when medical costs so dang much. They want us to go to doctors and stay healthy but the costs get outrageous. Hate to say it but I do not go unless need be so I can keep food on our table.
Leah | 08.17.15 @ 22:14
I avoid the doctors. I can't afford the amount of money it costs to stay healhy
STOKES | 08.17.15 @ 22:52
I keep a savings account just for medical emergencies, but when there is an emergency, it's never enough.
connie | 08.17.15 @ 23:21
Fortunately, I have not been hit by a large unexpected doctor bill, however I have a very close friend that has. I helped her write a letter to the office manager explaining her situation and the fact she lives on a fixed income. Upon request she had to submit additional paperwork for the office manager to review. Once the documents were reviewed my friend was approved for a long term, no interest payment plan. More often hospitals and doctors are willing to work with a patient who has limited resources.
Wanda Langley | 08.18.15 @ 13:51
Health Plan deductables are getting higher than most households can afford. It is hard for famiies with children to save for unexpected medical bills and stay on top of their other bills. Most hospitals will work with you on payments, but a lot of the doctors will not.
$commenter.renderDisplayableName() | 01.26.21 @ 14:22