High Deductable Insurance Defines Health Market

A high deductible plan only works if the individual who buys it plans ahead, putting aside adequate funds to cover any ordinary illness costs that fall under the deductible, and for a catastrophic illness that will require the full up-front cost of the deductible, which could be as high as $5000.

I believe these high deductibles are great, I use them, in that when one has to spend their own money on the every day health problems they will be more ready to question the provider on just what is being done and how much it will cost. This is called the free market and it works.

High Deductible Plans Creating Health Care Slowdown
Source: Walter Russell Mead, "High Deductible Plans Creating Health Care Slowdown," The American Interest Blog, August 21, 2013.
August 27, 2013

A new study by the Kaiser Family Foundation found that in 2013 health care premiums went up 4 percent for families and 5 percent for individuals. That's down from the 10 percent increases we saw in the early aughts. ObamaCare supporters have been quick to grab it as a political football, arguing that this data proves that premiums aren't spiking in anticipation of the Affordable Care Act (ACA), says Walter Russell Mead, the James Clarke Chace Professor of Foreign Affairs and Humanities at Bard College and editor-at-large of The American Interest magazine.

• But partisans on both sides agree that a big driver of the relative decrease is the rise of high-deductible health care plans.
• So, these savings have little to do with ObamaCare either way.
• Instead, they stem from exactly the kind of high-deductible, catastrophic plans that the ACA seeks to limit.
• The data simply points to a very intuitive principle: one of the best ways to make overall health care spending go down is for more individuals to spend less on it.
• The Robert Wood Johnson Foundation found that these plans cut down on spending by 5 to 14 percent.

Obviously, high-deductible plans aren't good for everyone, and there are a lot of questions surrounding financial security for those who rely on them. But for certain segments of the population, these kinds of plans make a lot of sense, and indeed younger employees have often shown a preference for them when given a choice. For them, and the economy as a whole, high-deductible plans are a good thing.