I think it only delays the inevitable and ends up making things worse. If people don't have the money for surgery (and really how many of us can pull ou $5000, right no). They'll delay it. Delay it too long and that $4000 surgery becomes a $50000 intensive care, emergency operation.
I keep a savings account around with a minimum balance of $5000. The only reason I have that money sitting there and I am not using it as a down payment for a car I so desperately need is because I need it for my high deductible plan. I also have an HSA (health savings account) that I am slowly adding money to every month, which at the moment is mainly used to pay for prescriptions and the like.
Now, one could suggest that I change my plan to a non-high deductible one so that I don't have to keep that money sitting around in savings, but then my costs per month would go up $300, whereas my high deductible plan is entirely paid for by the company I work for. I don't go to the doctors nearly enough to that the extra money I spend per month would counter-act the amount I am paying out of pocket now because I never reach my deductible.
This misses the point of high-deductable insurance. It's not simply the idea that you should share more of the cost. The idea is, rather:
* Low-deductable insurance is inherently more expensive.
* The difference in premiums between low- and high- deductible insurance gradually funds your HSA.
* When you're young and you start your HSA, you also happen to be actuarially less likely to need the money going into your HSA, so it grows to cover your deductible (or, the savings gradually displaces whatever you deposited to start your HSA; whatever).
In the presumed common case, your deductible is fully funded by your HSA which is itself fully funded by the difference in premiums over a few years. That's all money that would simply have been remitted to your insurer if you had a low-deductible plan. The high-deductible plan leaves you better off.
(There's also the more meta point that health insurance exists to keep you from being bankrupted by e.g. appendicitis, and not as a cost-saving plan for routine care.)
Unfortunately, we never repeated the rand experiment, so it's a bit dated. For some reason we never tried repeating it before pushing massive changes in the law.
"No significant effects on health" isn't entirely accurate; the "average" participant had no negative effects on health, but several of the subgroups did, mainly poor people with chronic conditions who had better compliance with treatment regimens, and better outcomes, in the free-care case. Here's the abstract: http://www.nejm.org/doi/full/10.1056/NEJM198312083092305
I'm familiar with this paper. Unfortunately it's deeply flawed.
The RAND health experiment studied 30 measures of health. Two of them were statistically significantly improved - vision (due to free eyeglasses, p=0.001) and blood pressure (p=0.03).
Simple math shows that 0.97 ^ 30 = 0.4. This means that the RAND experiment had a 60% chance of showing an effect in at least one particular submeasure even if there was no effect in any of them.
(The result on eyeglasses is strong enough to avoid this effect, however. So we can conclude that free glasses help people see better.)
Usually, you should always get an insurance deductible as high as you can afford to pay out of pocket. If you can't afford to pay the deductible out of pocket, you should look for a lower one. So a $5000 deductible isn't for everyone, but it would be good if the people who could afford it would start to use it and bring some price-sensitivity into the system.
Most young people would (a) be better served in the immediacy by the highest possible deductible and (b) once established in one, grow into middle-aged people who have set aside that deductible just by maintaining their HSA.
Converting to high-deductible is a problem if you're living at or above your means and are approaching middle age. But presumably regardless of your socioeconomic status, if you're just starting out in the market, given the choice between high- and low-, you're better served with high-.
First dollar coverage of many things is mandated by the ACA. It's not clear yet which things (HHS and other agencies need to first "recommend" the required services), but first dollar coverage is mandated.
Currently, every plan I've come across also covers preventive care (immunizations, cancer screenings etc.), because insurance companies realize that this saves them money in the long run. The ACA just standardizes and regulates this. This is actually in the interest of the consumer, because every plan has to have a common set of preventive care services it has to provide for free, which makes plans much easier to compare.
In what hypothetical world? It sounds like the hospitals in the US couldn't care less how much they charge people since they'll just sue you into oblivion if you don't pay.
What's the difference between a $1K deductible and a $10K one? How's that going to make one bit of difference?
Consumers have no say in how much the procedures cost. There's no "price pressure" from anyone but the group buyers, those being the insurance companies and Medicare.
Consumers now have an incentive to shop around or try alternate treatments.
When I'm rushed to the hospital after a taxi runs me down on my motorcycle, I'm not in a position to shop around.
When I'm sick with a flu and subsequent sinus infection, barely able to perform basic daily tasks without mental exhaustion, I'm in no position to shop around.
The wannabe-libertarian ideal doesn't work for healthcare.
"Too bad"? You like thinking about a $5000 bill when you're headed to the OR, perhaps straight from the ER? You think this is feasible for the vast majority of people?
I wonder what % of HSA policyholders actually have that amount sitting in savings at the ready. How many took the HSA policy because it was cheapest, not knowing the obligation at the other end of the day?
And even if you did, one incident would wipe that account and you would need to replenish it ASAP.
Sounds like it's still your money being spent. Do poor Americans typically have HSAs? Could people afford multiple hits? Where does the money come from after the HSA has run out?
Of course its still your money being spent (though you get some tax benefits).
People should be able to afford one deductible per year. Not sure what you mean by multiple hits.
I agree with yummyfajitas, but bottom line is, you should only get a high deductible plan if you can afford it. Thinking about a 5k bill as you head to the ER shouldn't be a problem then. If you can't afford it, d;not get it.
Of course, therein lies the problem: people who can't afford it choose it because its the cheapest. Its a problem, but banning high deductible plans for everyone is certainly NOT the solution.
Multiple hits meaning more surgeries per period that the savings can be refilled. Like, say, if you get into a major accident requiring multiple surgeries, or get a condition that requires multiple surgeries or extensive treatment. People can get seriously ill, not just "average" sick.
The $5000 deductible is per year. Your typical decent high-deductible plan will have a $5000 deductible and 100% coverage thereafter until year end.
The worst-case scenario with such a plan is that you end up with a chronic condition that requires extensive treatment every year, at which point it will cost you $5000 per year. Oh, and that's typically a per-family deductible, not per-person.
Just to put that in perspective, health care spending in the US as of 4 years ago was about $7400 per person. It's likely higher now. So if we managed to get into a situation where everyone was spending $5000/year on the deductible and $100/month on premiums, that would actually be less spending... and that assumes that everyone is sick all the time.
Now in practice, we won't get there; even high-deductible plans cost have more than $100/month premiums when you take away employer subsidies. But the point is that having high deductibles and HSAs that automatically get money put into them every year for those who can't afford to do so themselves is not a completely unreasonable approach to the situation. Actually getting the politics and details worked out could take some work, of course.
"HSAs that automatically get money put into them every year for those who can't afford to do so "
That's encouraging too, although I bet it doesn't refill at the same rate as topping it up yourself?
I still think it's the wrong thing to do, though. I can appreciate the market pressure idea, but there are other ways to lower prices charged for procedures, and this way still involves people actually worrying about whether they have enough money for health care. Do Americans realize just how much mental angst they cause themselves actually devoting this mental energy to worrying about whether they will have enough money to make themselves not sick, if they get sick? All this pride or whatever at choosing clever HSA solutions or having an awesome work health care policy is simply relief at not having to worry about health care bills. It's not a value add, you're simply avoiding the horror of a double whammy: getting very sick and going bankrupt (or seeing your lifestyle change drastically due to budget concerns). It's the awesome opportunity to get completely fucked.
But if this HSA/whatever is some kind of compromise towards progress... well, hope it works.
That's encouraging too, although I bet it doesn't refill
at the same rate as topping it up yourself?
No one is doing that sort of thing yet, so it's impossible to say how it would work if it were done.
I think we Americans have a pretty good idea of how much the current situation sucks. The issue people worry about has three aspects (in a very oversimplified view):
1) How do we make it not suck for individuals?
2) How do we, as a society, stop spending 16% of GDP (and climbing) on healthcare?
3) How do we avoid some sort of explicit rationing?
People's worries are that a lot of proposed solutions for #1 seem to imply giving up on #2 or #3. I suspect the worries about #3 are overblown, but it's hard to say without doing an experiment of course.
Luckily, perhaps, experimenting on humans is considered acceptable in politics. ;)
The details may change between the policies, but I do think the limit is per period, not per incident (how would you classify that, anyhow? Does several rounds of chemo count as one, or more incidents?).
Too bad it becomes illegal in 2014.