30 January 2012

Things that are not at all surprising, part 26

I remember way back in the paleolithic era when the debate was actually going on over what health care reform would look like (before we settled on "greatest threat to liberty ever," that is) and my comment section was deluged with folks who railed against the very concept of universality in healthcare insurance. They, further, denied that such a thing as involuntary uninsurance existed, or that underinsurance was a problem at all. These commenters tended to be the rugged individualists of our great nation, and their testimonies were along the lines of: "I have type 1 diabetes and I've had three limbs amputated and I do just fine with my catastrophic health insurance plan" or "I have chosen not to buy health insurance and I'm just so badass that if I ever get sick I will go off onto an ice floe so as not to be a burden to society, so why should we hand out free healthcare to goddamned moochers?"

Or something like that.

So, it actually turns out that catastrophic/high deductible plans actually kinda suck. I'll take a moment to allow you to recover from the shock of that.

Now we already knew that being uninsured made you (that's the general you, not you in particular) more than four times as likely to skip or delay needed care. That makes sense. Healthcare is expensive, even if you're only paying charity rates, if you can find them. If you have to pay, and you don't have a lot of money, in many cases you just don't get it. And it turns out the same phenomenon is at play with high-deductible "catastrophic" plans. When you have to pay out of pocket (which is the central concept of these plans), you're more than twice as likely to skip or delay needed medical care.

Still, high-deductible plans are great if you never have to make a claim, but there you have it...

Fun factoid: if you have a high-deductible plan, and someone in your family is ill, then the effects on your own health trickle down, as you also tend to skimp on your own health care.

And back to the subject of the truly uninsured, the CDC came out with a report which found that (again, brace yourself for the shock) being unemployed makes you about 3 times as likely to be uninsured.

Aaron Carroll takes on directly the myth of the "uninsured by choice" cohort:

Many people like to think that being uninsured is a “choice”. And they’re correct, in the sense that you can “choose” not to buy insurance. I get that. But many people “choose” not to buy insurance for the sole reason that it’s crazy expensive. The average – not gold plated, but average – employer sponsored insurance plan for an individual plan in the United States last year was $5429. And that was just the premium. It didn’t include deductibles, co-pays, or co-insurance. The average family plan was $15,073. The median salary in the US, on the other hand, was less than $50,000 for households. For individuals, the median paycheck is $26,364. When you’re making that amount, and you lose your job, paying for that insurance plan is no longer possible. Paying for COBRA is even harder, as it’s usually more expensive.
I kind of wonder why I am wading back into this topic. Experience has shown me that it's become such an ideological shibboleth that the true believers are completely impervious to reason and data. I'm like a moth to the flame, I guess. I just can't leave it alone. Someone is wrong on the internet.


  1. Well, I am hardly typical, but I have always had a high deductible plan and money set aside to cover the deductible if needed - nowadays it's untaxed money in an HSA, but it hasn't always been. We all go to the doctor yearly, the kids get their shots, wife was able to get her gall bladder out when needed, we've even managed to do things like laser treatments for my daughter's port wine stain and get Lasik for for my wife.

    When I started on blood pressure medicine I talked seriously with my doctor about cost, and we were able to come up with a combination of meds that worked and were affordable instead of going with the newest, coolest meds that many docs start with.

    I would say that such plans don't suck at all, rather that properly managed they are the best way to go.

    Also, not sure where those average prices you quote come from. You can go to BC/BS, Regence, Group Health, or others and buy health plans four yourself or your family for considerably less than that.

    It's true, go check, I'll wait...

    See? If an employer is charging that much for a group plan they are ripping off their employees, because it certainly isn't costing them that much.

  2. Oh, to fend of those that say "wait 'til you have a truly catastrophic healthcare expense" I will say that we have had NICU stays with two children, including one that involved specialist in Canada and France, and a bill that looked like a mortgage, and that in both those years we reached the plan's out of pocket maximum. Before you cry BS about that, our host here could verify the existence, if not the details, of one of those cases.

  3. IF you are self-employed the high-deductible plans are the only affordable plans out there. I have to pay for all of my health care costs whether it is thru a deductible or monthly premiums. For two relatively healthy adults, it ends up being thousands of dollars cheaper to have the high deductible.

    However, the biggest benefit of the insurance plan isn't the amount they pay—which is usually zero—it’s the negotiated rate the I end up paying to the provider. I just had a minor procedure that was billed at just over $600. The allowed amount was $238. The insurance paid nothing and I paid the allowed amount. Without insurance I would have been billed for all of it.

    I can see how people would put off medical treatment if they knew they had to pay for it, but if the choice is no insurance or high deductible, you’re better off with the high deductible.

  4. If you're a very savvy consumer, a high deductible might be acceptable: you have an incentive to get medical services only when you really need them, and you don't postpone the essential stuff because you're too cheap to pay for it. However, most people are just not that engaged, brilliant or rational. A great number will postpone very important stuff (the disincentive will confuse them), and society will end up paying more down the road for conditions that could have responded well to early detection and treatment (and we'll have a lot of people without psychotherapy, eyeglasses and dental care).

    That said, high deductible is really the only option for middle class self-employed people until the ACA kicks in fully. It's not really a "choice" for a lot of people; it's all they can sanely afford.

  5. Who would have thought that people skipped *needed* medical procedures if they had to pay extra for them. Isn't it amazing what Science finds out? Captain obvious to the rescue! Next thing you know, these scientist find out that water is wet. Or more, they need to prove to politicians and the media that water is wet. And the politicians and the media will ignore these findings.


  6. VinceRN,

    What you don't understand is the benefits you personally experience from high deductible health insurance don't scale to society at large.

    High deductible health insurance is cheap because of selection bias. The product is unappealing to people with chronic conditions, thus they are underrepresented in the pool.

    "See? If an employer is charging that much for a group plan they are ripping off their employees, because it certainly isn't costing them that much."

    No, those figures are absolutely correct. The difference between employer-provided insurance and the individual market is that employer-provided insurance is non-discriminatory. Try buying health insurance on the individual market when you're already sick.

    Data is not the plural of anecdote.

  7. Just did our taxes. We spent 30% of gross income on health care in 2011. In 2009 and 2010 it was around 25%. We have relatively good insurance which covered one hospital stay at 90% and the other at 70% (sorry, husband decided to go off the rails out of network and the cops didn't let us pick the hospital). We ended up in collections with a couple of providers despite paying as much as possible as fast as possible. This is all despite recieving a charity discount at both hospitals and reaching plan out-of-pocket max. Even if a high deductible plan would work for us, we can't get far enough ahead to even consider it. And I need surgery again this year...so it goes.

  8. @Anonymous

    Actually it does scale up. It works great for anyone willing and able to do it. It's just more work, takes more thought. Certainly it wouldn't work for those with serious chronic health problems, but those are a minority. I am not suggesting that everyone do it this way, but there are many that could be doing it would benefit greatly from it.

    I've always hated that phrase "data is not the plural of anecdote". Certainly the experiences of one person are anecdote, but that doesn;t mean they are wrong or invalid. What do you call it when you gather the experiences of a hundred people? I'm pretty sure that most would call it data, and I'm pretty sure that most would call any one of those individual experiences taken by itself "anecdote". If you gather up a bunch of anecdotes, suddenly each one becomes a data point.

    What my anecdote shows is that is possible to do it this way, and that the statements "high deductible plans actually kinda suck" and "if you have a high deductible plan...you also tend to skimp on your own health care" are not true.

    Certainly there are those that do, those that get those plans and don;t use them correctly. Here's where we differ. I think educating and informing people is the solution to that problem, you think a huge government hand out coupled with giving control of a large and important part of our lives to the government is the solution. You think that if it doesn't work for all, then none should be allowed to do it.

  9. VinceRN, You want to leave "control of a large and important part of our lives" in the control of private insurance companies. I would rather it be in the control of the government who is actually elected by the people.

    The government is us, the people of America. The insurance companies are private, for profit businesses. Their main concern is not getting us healthcare, but making money for their shareholders.

    And yes, buying on the open market may be working fine for you now. What is going to happen to you if you develop a chronic illness? Then what?

    What do you suggest people with heart disease, cancer, etc do? What should my friend do who is too sick to work, is no longer eligible for cobra and is now out there on the open market without insurance and stage IV ovarian cancer? Please "educate and inform" me about what kind of insurance she can buy.

  10. VinceRN: You say people with chronic health conditions are a minority. 43 percent of the US population is technically a minority, but I wouldn't try to stand too hard on that debate point.

    And chronic health problems are not necessarily defined as things like "need oxygen to cross the room." Frequently, they're "need maintenance medication every month, so that you WON'T need oxygen to cross the room while you're still of working age." That's why it's called preventative care...


Note: Only a member of this blog may post a comment.