Many Americans signing up for new health care policies are receiving an unwelcome surprise: higher deductibles.
Insurance plans, whether obtained through an employer or purchased individually via Affordable Care Act marketplaces, typically include a rise in deductibles compared to prior years, CBS News reports.
Deductibles are the portion of medical bills individuals must pay before their insurance begins to cover the costs. They have surged 67% since 2010 for employer-sponsored plans, says an article on the broadcaster’s “Moneywatch” news portal.
The average deductible for an individual bronze-level plan will exceed $5,700 for 2016, according a plan-comparison service cited in the article.
A key goal of higher deductibles is to encourage consumers to be more cost-conscious in their selection of health care services and providers.
That strategy is only partially effective. Many consumers respond to higher deductibles by cutting back on health care, including both useful and potentially wasteful treatments.
That’s the finding of a report published late last year by the National Bureau of Economic Research.
The researchers looked at the medical spending patterns of several hundred thousand employees and their families over a five-year period, during which their insurance was switched to high-deductible plans.
Their total health care spending declined about 13% annually. But “nearly the entire decline resulted from an outright reduction in the consumers’ demand for services, rather than from them price shopping or substituting less costly procedures,” the researchers found.
In fact, “some of the services consumers elected to forgo were likely of high value in terms of health and potential to avoid future costs,” they noted.
According to the CBS article, “many workers, fearful of incurring high out-of-pocket costs, respond to the ‘spot’ price, or the up-front cost, rather than considering what they are likely to spend throughout the year and whether they’ll meet the deductible.”