Analysis: High-deductible health plans broke the US health insurance system

Thirty-nine percent of large employers today offer their staff only high-deductible health plans, according to a survey by the National Business Group on Health. Representing a 7 percent increase from 2009, the trend toward high-deductible health plans is leaving more employees with unsustainable healthcare costs — and breaking the health insurance system, according to a Bloomberg feature by John Tozzi and Zachary Tracer.

Here are five highlights from the report:

1. High-deductible health plans began growing in popularity 15 years ago when President George W. Bush's administration changed the U.S. tax code. The changes incentivized employers to offer high-deductible health plans.

2. When the 2008 financial crisis hit, companies pushed more healthcare costs onto their employees to cut expenses. The rise of high-deductible health plans continued after President Barack Obama passed the ACA in 2010, after which millions of previously uninsured Americans gained health plans, many with at least a $1,000 deductible.

3. Since 2009, there has been a 22 percent increase in the number of workers with high-deductible health plans, with half of U.S. employees now purchasing them, according to a Kaiser Family Foundation report. The change comes as an increasing number of workers say they are unable to pay a $400 emergency expense without selling something or borrowing money, a Federal Reserve report found, cited by Bloomberg.

4. While much of the thinking around high-deductible health plans centered on the idea that employees, facing greater out-of-pocket costs, would shop around for healthcare, another unintended consequence occured. To save money, workers went without preventive care and medication, leading to more severe diagnoses down the road. This has been a significant cost to the U.S. health and insurance system, according to the authors' analysis.

5. Some large employers, including JPMorgan Chase, are shifting gears on high-deductible plans. JPMorgan CEO Jamie Dimon said in early June, "We all thought high deductibles are going to drive people to get involved — 'skin in the game.'" Instead, employees "didn't get the surgery they needed, when they needed it, because they can't afford the high deductible in one shot." The company has plans to effectively eliminate deductibles for its employees who make less than $60,000 annually. JPMorgan has also teamed up with Amazon and Berkshire Hathaway to try and curb healthcare costs for their employees through a venture led by Atul Gawande, MD.

More articles on payer issues:
Partners moves all employees from BCBS to its own health plan
Mississippi's only academic medical center may exit BCBS' network
How healthcare execs feel about Optum's Advisory Board acquisition 7 months later: 5 insights

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