According to a recent study by the National Center for Health Statistics at the U.S. Centers for Disease Control and Prevention (CDC), the percentage of privately insured American adults aged 18 to 64 with high deductible health plans (HDHP) has risen from 26.3 in 2011 to 39.3 percent in 2016. This represents an increase of almost 50 percent in HDHP insured people.
According to the report, “In 2016, HDHP was defined as a health plan with an annual deductible of at least $1,300 for self-only coverage or $2,600 for family coverage.”
The report tracks both employer-provided policies and policies purchased by individuals, and both groups are seeing significant recent increases in use of HDHPs. This is not surprising because HDHPs are less expensive than health insurance policies with lower deductibles and other patient-paid out-of-pocket costs. However, HDHPs become expensive when used, as the higher deductibles, copays, and other expenses like potentially higher prescription drug costs can easily overwhelm a typical person or family’s budget.
An unanticipated medical bill of at least $1,300 represents a crisis for many Americans. As NPQ recently reported, consumer debt is at an all time high, currently $12.7 trillion. “Almost two-thirds of Americans can’t weather a $500 emergency without borrowing or cutting back on other spending.” For people with chronic conditions and other ongoing healthcare needs, the annual deductible becomes a regular expense. The study reports that the percentage of privately insured adults aged 18–64 with HDHPs who report having problems paying their medical bills is 50 percent higher than those with traditional health plans, centered almost exclusively in patients who have employer-supplied health insurance (presumably, if an individual is choosing to purchase an HDHP, they have the ability to cover the patient’s share of healthcare expenses under the plan).
These data represent a warning for nonprofits providing services to people in economic need, including the medically indigent. The rise of HDHPs represents a rise in the number of economically fragile individuals and families who may suddenly need assistance both they and the nonprofits serving them never anticipated. Not only do more people have large healthcare bills to contend with, but many are also hit with income reductions due to taking uncompensated time from work to take care of themselves or a loved one. Some even lose their jobs due to an illness.
More Americans are insured since the passage of the ACA, either through Medicaid expansion or private insurance. However, the cost of private insurance is still rising, and HDHPs are one way to alleviate the pain of premium increases. HDHPs are a great thing for those who can afford the patient’s share of costs, but for the rest, they represent a contingent personal and societal liability that will need to be addressed by nonprofits and government services as well as patients.—Michael Wyland