In yesterday’s thread that PPOs are merely a plan design and not an indicator of quality nor shittiness, Dr. Bloor restates a very important point about high deductible plans in response to another comment:
The High-Deductible Health Plans scare me. Are the prescription rates for these plans pre-negotiated, or do you eat the cost of prescriptions at retail rates until you hit the deductible?
You should never take on more of a deductible than you can assume you’ll spend in the course of a year. Folks who either opt for big deductibles or have them foisted on them by their employers for the sake of saving a few bucks on their monthly premium are aching to be victims of the penny-wise-pound-foolish approach to insuring their families.
High deductible health plans (HDHPs) are “consumer-driven” health insurance. The theory of change is that the consumer (not patient, and not person but consumer) will be able to effectively assess their healthcare needs and since they are paying the first several thousand dollars in expenses, they will not use healthcare that is low value to them. The IRS defines a HDHP as having a deductible of at least $1,300 for an individual in 2016. A HDHP at $1,300 deductible and no other cost sharing has an actuarial value of 77% or 78% at a rough back of the envelope guess.
HDHPs are often tied to Health Savings Accounts (HSA) where people can put pre-tax money into an account to cover the deductible. The money rolls-over year after year (unlike a Flexible Spending Account) and it can be placed on Red at the casino or invested.
I am not a big fan of high deductible health care as the evidence is good that they reduce utilization but the utilization reduction is not targeted at bad or low value care, it is not targeted at all. Good care is excluded due to cost. Recent evidence has shown that there is not a cost cascade two or three years out after employer sponsored insurance switches to HDHPs from low deductible health plans, but that study is fairly limited to a healthy population (employed individuals).
This is a problem with the ACA. Catastrophic, Bronze and non-cost sharing Silver plans are low actuarial value plans when taken in the context of defining a HDHP. Most of these plans have HSAs attached. However I have a question about whether or not HSAs can be attached to some Silver plans? Do no deductible Silvers qualify for HSAs?