If you take the time to ask some of your friends — particularly those in their early 20s — you will most likely be surprised to find that many of them have deductibles on their health insurance policies that run into the five figures. Ouch! And yikes! And, the Internal Revenue Services sets an even lower threshold for what constitutes a high deductible plan (High deductible, 2019).
Increasingly, high deductible policies are being offered on the insurance marketplace — these policies seem to be driven by the growing premium costs for many traditional insurance policies that place them outside the budget of many working class Americans (Rivera, 2018). Anecdotal evidence suggests that many younger Americans are paying more for their insurance premium than they are for their rent. These expenditures are crippling to them. The argument is that these high deductible policies still provide insurance coverage for millions of Americans, protecting them in the case of a catastrophic event that would otherwise potentially bankrupt them. And, proponents of these policies argue that there are other benefits as well. However, a more nuanced analysis of these policies clearly indicate that the downsides far outweigh the pluses.
Proponents of these high deductible policies argue that in addition to extending coverage to millions of Americans who would otherwise not be able to afford medical insurance these policies will also encourage healthier habits. For example, high deductible policies may discourage people from over-using their doctors — they will not visit every time that they simply have a sniffle or a tickle in the back of their throat (Knickman, 2013). Instead, they will prioritize their health concerns and weigh when it is or is not important to seek out medical care. And, similarly, people may be more willing to invest in physical exercise and healthier food, if they realize that the costs of not engaging in these high activities is high.
But, despite these supposed benefits, the drawbacks of these policies are even higher. Rather than optimizing when a person will go to the doctor, people who face high deductibles will simply avoid going to the doctor unless they face an emergency — driving up both their own costs and the costs to the over-burdened public health system. Also, people who are opting for these high deductible options often do not understand the trade-offs between immediate investments in good health, such as better dietary choices, versus long-term health savings. And, thus, they are unlikely to embrace healthier choices.
Moving forward, I would in fact advocate that these health insurance policies should not even be allowed as an option, since they do not provide sufficient coverage.
References:
High deductible health plan. (2019). HealthCare. Electronic. Retrieved from: https://www.healthcare.gov/glossary/high-deductible-health-plan/
Knickman, J. (2013). The downside of high-deductible health plans. Huffington Post. Electronic. Retrieved from: https://www.huffingtonpost.com/james-r-knickman/the-downside-of-highdeduc_b_4079460.html
Rivera, A. (2018). The pros and cons of high deductible health plans. Business News Daily. Electronic. Retrieved from: https://www.businessnewsdaily.com/10723-pros-cons-high-deductible-health-plan.html
Increasingly, high deductible policies are being offered on the insurance marketplace — these policies seem to be driven by the growing premium costs for many traditional insurance policies that place them outside the budget of many working class Americans (Rivera, 2018). Anecdotal evidence suggests that many younger Americans are paying more for their insurance premium than they are for their rent. These expenditures are crippling to them. The argument is that these high deductible policies still provide insurance coverage for millions of Americans, protecting them in the case of a catastrophic event that would otherwise potentially bankrupt them. And, proponents of these policies argue that there are other benefits as well. However, a more nuanced analysis of these policies clearly indicate that the downsides far outweigh the pluses.
Proponents of these high deductible policies argue that in addition to extending coverage to millions of Americans who would otherwise not be able to afford medical insurance these policies will also encourage healthier habits. For example, high deductible policies may discourage people from over-using their doctors — they will not visit every time that they simply have a sniffle or a tickle in the back of their throat (Knickman, 2013). Instead, they will prioritize their health concerns and weigh when it is or is not important to seek out medical care. And, similarly, people may be more willing to invest in physical exercise and healthier food, if they realize that the costs of not engaging in these high activities is high.
But, despite these supposed benefits, the drawbacks of these policies are even higher. Rather than optimizing when a person will go to the doctor, people who face high deductibles will simply avoid going to the doctor unless they face an emergency — driving up both their own costs and the costs to the over-burdened public health system. Also, people who are opting for these high deductible options often do not understand the trade-offs between immediate investments in good health, such as better dietary choices, versus long-term health savings. And, thus, they are unlikely to embrace healthier choices.
Moving forward, I would in fact advocate that these health insurance policies should not even be allowed as an option, since they do not provide sufficient coverage.
References:
High deductible health plan. (2019). HealthCare. Electronic. Retrieved from: https://www.healthcare.gov/glossary/high-deductible-health-plan/
Knickman, J. (2013). The downside of high-deductible health plans. Huffington Post. Electronic. Retrieved from: https://www.huffingtonpost.com/james-r-knickman/the-downside-of-highdeduc_b_4079460.html
Rivera, A. (2018). The pros and cons of high deductible health plans. Business News Daily. Electronic. Retrieved from: https://www.businessnewsdaily.com/10723-pros-cons-high-deductible-health-plan.html