High-Deductible Plans ‘Quiet Revolution in Health Insurance’

BjbjLULU JEFFREY BROWN: Next, a growing changein the way Americans are buying and receiving health insurance. NewsHour health correspondent Betty Ann Bowserreports. BETTY ANN BOWSER: Dennis Adams is what theinsurance industry calls a young invincible. DENNIS ADAMS, professional dancer: I figurednothing would happen to me. When I was 26 or 25, when I got the plan originally,I had never had surgery, I had never broken a bone, I had never been in an ambulance,I had never been to the hospital. BETTY ANN BOWSER: So when the non-profit OberlinDance Company of San Francisco offered a new type of health insurance three years ago,the 27-year-old professional dancer didn't.

Think twice. He signed up right away. It was a high-deductible insurance plan thattraded lower monthly premiums for higher out-of-pocket costs to employees. In this case, Adams would have to pay $2,500up front before his health insurance would kick in, if he needed it. Then, the unthinkable. DENNIS ADAMS: I got hurt. BETTY ANN BOWSER: During a performance likethis, Adams tore his ACL.

When he need an MRI to determine how bad thedamage was, the provider demanded the $1,600 test be paid for up front. Adams was stunned, but, even worse, he didn'thave the money. Of the growing number of companies that aregoing to high-deductible plans, about 23 percent of them offer employees some type of rainy-dayoption, usually called a health savings account, or HSA. And even though the dance company is a non-profitwith a tight bottom line, it puts $100 a month in each employee's account. The 30 people on the plan can also contributeto it tax-free, and the money rolls over year.

After year and from job to job. In the end, workers comp paid for Adams' treatmentbecause the injury happened on the job. But for the young dancer, it was a teachablemoment. He went back to a traditional plan with highermonthly premiums. Dr. Drew Altman, president and CEO of theKaiser Family Foundation in Palo Alto, calls this a reshaping of the insurance market. DR. DREW ALTMAN, President and CEO, Kaiser FamilyFoundation: Well you know, I think we ve been so focused on health reform in Washington,what we have missed is there is a quiet revolution.

Happening in health insurance out in the country. BETTY ANN BOWSER: According to Kaiser, lastyear, 31 percent of workers covered by their employers offered this type of insurance,with a deductible of at least $1,000. Enrollment has tripled, up from 10 percent,in five years. DR. DREW ALTMAN: They don't have a lot of weaponsto throw at their rising health care costs any longer, so they have really no choicebut to go in this direction, especially the smaller employers, who are getting hit especiallyhard by rising health care costs. So, we re seeing this quiet revolution inwhat health insurance really is.

It's changing in the country and it has bigimplications for people. PHIL LEBHERZ, founder and chairman, LISI:The logic is that, if you have a higher deductible, as a consumer, you're going to pay more attentionto the marketplace and how much people are charging you for their services. BETTY ANN BOWSER: Phil Lebherz is the founderand chairman of LISI, an agency that provides support for health insurance brokers throughoutCalifornia. About a third of his employees are on thesetypes of plans. And, Lebherz says, their rise in their popularitycomes down to economics. PHIL LEBHERZ: This move to high-deductiblesis really, at the bottom line, an economic.

Market adjustment to lowering the cost ofthe actual health insurance premium, putting some risk, or some emphasis, from a consumerstandpoint, and some interest in people's trying to stay healthy, so that it protectsthem and protects the company at the same time. What we're seeing is a change in the financingof health care, not an erosion of the coverage. The coverage is still there. In fact, there's more coverage than ever. BETTY ANN BOWSER: That's why, in 2009, thedance company's finance manager, Charlene Folcomer, recommended they start offeringa high-deductible plan with lower premiums.

About a third of the company's 100 full-timeemployees opted in. CHARLENE FOLCOMER, finance manager, OberlinDance Company: So, it's made a huge savings for us. The employees that are on it stay with itbecause they're getting used to it. They have to do what it takes to keep theirhealth care costs down now. BETTY ANN BOWSER: But a new study found peopleon these types of plans sometimes put off medical care, more often than those in traditionallow-deductible plans. The study's lead author is Dr. Alison Galbraith,a pediatrician at Harvard Medical School. DR.

ALISON GALBRAITH, Harvard Medical School:What we found was that, in families in high-deductible plans, there was a much higher prevalenceof delayed or foregone care due to cost, compared to people in the non-deductible plans. And an interesting thing was, it was — therewas the suggestion that actually it wasn't necessarily the chronically ill family memberswho were delaying care. BETTY ANN BOWSER: But, Galbraith added, theseplans can work well for some people. DR. ALISON GALBRAITH: Ideally, the best personin a high-deductible plan, well, it's a healthy person who doesn't need a lot of care.

And for those types of people, they're greatplans. So that's why some families will want to buythem, because it may be the only affordable option for them. BETTY ANN BOWSER: Lauryn Menard, an administratorfor the dance company, is one of those ideal candidates for this type of insurance, andshe's happy with it. LAURYN MENARD, Oberlin Dance Company: I feellike I'm getting good coverage for me. I'm young, I'm healthy, I'm savvy. I know, you know, what my costs are goingto be per month. I know those costs.

I know what my expected medical costs are,so — so, I — and I feel like, if something were really worrying me, I could totally goto a doctor. BETTY ANN BOWSER: But even Menard admits shenow sometimes puts off going to the doctor to save money. LAURYN MENARD: I do get headaches about oncea month, and they can get really bad. And I still haven't gone to see a doctor aboutit. And I don't know. I haven't made plans to yet. It's like, I'm kind of trying to cheat thesystem a little bit, because it's like, if.

I don't go and it's not really serious, thenI'm saving money. BETTY ANN BOWSER: With this so-called quietrevolution already well under way for thousands of Americans, Altman is pushing the industryand the country to take stock. DR. DREW ALTMAN: We really need to have a nationaldiscussion about whether this is a good thing or this is a bad thing. Or it may mean — I think what it really meansis, this is okay for some people if you are pretty healthy. But we have to worry about what these veryhigh deductibles, $2,000, $3,000, $4,000,.

$5,000 deductibles, is that really even insurancecoverage? BETTY ANN BOWSER: The number of Americansenrolling in high-deductible plans is expected to rise as long as the cost of health premiumsalso continue to climb. JEFFREY BROWN: Online, you can find our listof the top 10 things you need to know about high-deductible insurance plans. Plus, you can submit your questions via Facebookor Twitter or on our website, and we ll post answers from experts next week. urn:schemas-microsoft-com:office:smarttagsPlaceType urn:schemas-microsoft-com:office:smarttags PlaceName urn:schemas-microsoft-com:office:smarttagsState urn:schemas-microsoft-com:office:smarttags.

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