Although more Americans have health insurance coverage, 25 percent of non-elderly Americans don’t have enough liquid assets to cover the deductible on their health insurance plan, according to a new report from the Kaiser Family Foundation.
The report finds that many consumers don’t have the cash on hand to cover the cost of a mid-range deductible or $1,200 for an individual or $2,400 per family. High deductible health plans require that consumers cover their health care costs out of pocket until they’ve met their deductible.
The goal of such plans is to keep costs down by encouraging consumers to consider the costs and benefits of health care before purchasing it. “It’s really up to the consumer with these plans to comparison shop and look for cost savings when making medical decisions,’ says Kevin Coleman of HealthPocket.com.
For consumers, that means negotiating for any non-emergency services and evaluating medical bills for potential errors. “The big challenge is when it’s about you or someone you love, you lack objectivity, which means you lack leverage,” says Sarah O’Leary, CEO of patient advocacy company Exhale Health.
High-deductible plans, especially those paired with a funded health savings account may be a good alternative for those that are healthy or have the financial means to cover the costs of a medical emergency. However, the KFF report finds that as deductibles creep beyond the scope of savings, consumers are likely to either put off care or rack up medical debt.
A Gallup poll released last December found that one in three Americans have put off treatment for themselves or a family member because of cost—the highest rate in the history of the poll. There may be good reason: A separate report released also released in December by the Consumer Financial Protection Bureau found that about half of all debt that goes to collections agencies represents medical bills.
Such statistics suggest that while Obamacare has succeeded in expanding access to health insurance to most Americans, the law has much more work to do when it comes to the goal of making care affordable for everyday consumers.
Increasingly, consumers are turning to high deductible plans not because they’re the best option for their family, but because those are the plans with affordable premiums or the only type of plan offered by their employer. (Nearly one in five employers offers only a high-deductible plan to workers.) “High deductibles are going to continue to be a problem [for some consumers] until we can get costs under control or figure out how to get people to save more money,” says Barbara Gniewek, principal with PwC’s Human Resource Services practice.
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