A dozen or so years ago, a small group of wealthy corporate insurance executives decided their customers were not paying nearly enough for the medical care they received. How else to explain the fact that managed care — which they had touted as a silver bullet just a decade earlier — had failed miserably at controlling health care costs.
Those executives came to embrace as the newest silver bullet a strategy incubated at the National Center for Policy Analysis, a Dallas-based libertarian think tank that advocates for fewer government regulations and more individual responsibility. The strategy that emerged in the early 2000s was what the insurance industry called consumer driven health plans — CDHPs for short. These plans are superficially appealing because the premiums are lower. But that obscures a defining and central feature of CDHPs: a requirement that folks enrolled in them, regardless of income, pay a substantial sum from their wallets for medical care every year before their insurance coverage kicks in.
In some ways at least, CDHPs are about less insurance. With every passing year, under the industry’s strategy, insurance companies would be paying a smaller percentage of medical claims while their customers would be paying more because of the high deductibles.
Fast forward to 2015 and the effects of that strategy are playing out – but not to the benefit of consumers. Instead, ever-increasing numbers of Americans are finding themselves in the ranks of the underinsured.
The latest evidence came last Thursday in a study released by the left-of-center Families USA. Using data collected by the Urban Institute’s Health Reform Monitoring Survey, the group found that more than one of every four adults enrolled in these CDHPs went without needed care because they didn’t have the cash to pay for it.
The most common types of care they skipped, according to Families USA’s report, were medical tests and treatments and follow-up care.
Some critics of high deductible plans have characterized them as “blunt instruments” because they typically are not adjusted to take an individual’s or family’s income into consideration. Someone making $50,000 a year has to pay the same amount out of his or her own pocket before insurance kicks in as someone making $250,000.
So it should come as no surprise that Families USA’s study found that lower- to middle-income adults were the most adversely affected by the steady growth of CDHPs, with almost one out of three (32.3%) Americans reporting they skipped needed health care because they couldn’t afford it.