Impatient

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High-deductible plans: Hidden costs, obvious frustrations

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Last week, I asked our awesome KPCC audience to share its experiences with high-deductible health plans.

Ellen Augustiniak, of Irvine, and Kevin Dick, of Palo Alto, are among those who responded to my call. Both Augustiniak and Dick chose high-deductible plans because they were far cheaper than plans with higher premiums.

(By the way, if this insurance jargon is making your head spin, check out KPCC’s glossary of insurance terms.)

Both Augustiniak and Dick say that being on the hook for a greater share of their health costs has spurred them to seek fewer medical services, and be more price-conscious when they do need care. And both agree that the experience of trying to shop for affordable health care is maddening.

That's where their experiences diverge.

Kevin's story: Costs are hidden

Kevin Dick is a student of economics.

From a rational, economic standpoint, he says a high-deductible plan is easily the most affordable for his family. (He shares his cost calculations in this post on his blog.)

But our health care system is less than rational.

"We very much like to be well-informed comparison shoppers," he tells me over the phone. "However, it is extremely difficult to do that with medical expenses. Unlike any other product or service you buy, the system seems designed to actually hide the cost from you."

Since Dick and his wife selected this type of plan in late 2009, he says their health habits have definitely changed. They try to be judicious about when they go to the doctor. That means almost never seeking care for an upper respiratory infection or a minor sprain.

When they do seek medical care for a specific issue and a doctor recommends a follow-up test or procedure, they inquire about the price, he says.

That's easier said than done. Dick says they have switched primary care providers because at one office, "their unwillingness to disclose and follow the estimates that they gave us was so bad."

When they know a procedure is going to be expensive, they try to call around and get price estimates, he says. But "in most cases, you get an almost unbelievable runaround."

Still, Dick says he and his family are sticking with their high-deductible plan. It’s the most cost-effective approach, but definitely not the headache-free choice.

"Even if you're definitely saving money, it's frustrating when no one is willing to disclose prices to you," he says.

Ellen's story: 'Something happened'

In her email to Impatient, Augustiniak says she and her husband had selected a high-deductible plan with a health reimbursement account several years in a row.

"We understood and were prepared for the possibility of having to pay a lot of medical bills if something happened," she writes.

Finally, she says, "something did."

To figure out what was making her ill, Augustiniak's doctor prescribed a slew of diagnostic tests. But, she tells me over the phone, "knowing that we would be responsible for the cost of the diagnostic tests really made me push back on some of the recommendations I got originally."

Constantly asking her doctor about the costs of recommended procedures, and which of those procedures were priorities, became frustrating, she says.

The health system isn’t set up for people to shop around for affordable care, she says, and "when you're sick and you're fearful… that doesn't make it easy to make super thoughtful, price-conscious decisions."

"It gets easier to do whatever someone is telling you to do," says Augustiniak.

In retrospect, she wishes she hadn't delayed some of those tests due to cost concerns. She recalls that she was getting sicker quickly, and her muscles weren't working, "so my hands started to clench up like a little gorilla."

"All the weird tests that he wanted to do might have caught my particular tumor more quickly," Augustiniak says. "I might have spent fewer weeks being pretty uncomfortable and a little scared."

She eventually got her diagnosis: "I ended up having chest surgery at the end of August to remove a benign tumor, and having to go through some relatively mild immune-suppressing treatments after the surgery to deal with an immune system complication."

Around that time, she reached her out-of-pocket maximum of about $7,000. At that point, Augustiniak says, she gave up being a cost-conscious patient.

"You just get sick of bickering with providers after you've had an acute incident like mine," she says.

She continues: "What does it get me to be a patient in an office who's second-guessing a doctor's clinical recommendation? It just gets me the reputation as a patient that’s hard to work with, and that's not a reputation I want to have when I'm counting on people to help me with my follow-up care."

For this year, Augustiniak and her family switched to a plan with a higher premium and a lower deductible.

Not addressing big costs

These stories point to the drawbacks of high-deductible health plans, says Sara Collins, vice president for Health Care Coverage and Access at The Commonwealth Fund, a New York-based health care research foundation.

The plans are intended to control health spending by exposing people to a greater share of their costs. But "it's really a stretch to think that deductibles are going to turn people into better shoppers when in fact there's so little information about the price of health care services or the quality of services," she says.

On top of that, Collins argues, the idea that high deductibles will contain health care costs is misleading. It's serious illnesses that drive health care costs, she maintains, not preventative services or prescriptions.

"The deductibles are putting more of a burden, as they get larger, on middle-income families, even though their ability to slow health care cost growth is really not that great," she says. "They're not addressing where the big costs really are - that's going to require a different approach than just increasing deductibles."

Tell me your story

As I mentioned last week, I plan to dig into how high-deductible plans are affecting people's health care decisions over the weeks and months to come.

So let's continue this conversation: Tell me about your experience in the comments section below, or e-mail me at Impatient@scpr.org. You can also share your story here.

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