As the cost of health care continues to skyrocket, businesses are asking their employees to share in the cost. More of the upfront cost is deducted from the paycheck for premium policies while low premium, high deductible health plans are offered as a fully covered option.
How do these health care plans with high deductibles affect the employer and the employee? Here are the benefits as well as the downsides of these policies.
Benefits Of A High Deductible Health Plan
These plans have a ceiling when it comes to deductibles. With proper budgeting, they can be a good choice for employees. Once the maximum is reached each year, coverage is typically 100% of expenses. Health care costs become a known quantity. Out-of-pocket expenses are linked to co-pays which can typically vary from 10 to 20 percent.
Most plans include preventative care at no cost to policy holders. Wellness classes, prenatal care, and annual checkups fall under this category. The idea is to keep the employee as healthy as possible to reduce the likelihood of long term care needs.
Health savings accounts (HSA) are linked with high deductible health insurance plans. The insured are able to place money into an interest bearing account on a pre-tax basis. HSAs are not use-it-or-lose it. Unused contributions build up over time and may be used during retirement for long-term health care needs.
The Downside Of Greater Out-Of-Pocket Health Care Costs
A high deductible health plan does change the way that employees use their health care package. They are less likely to head to the higher priced emergency room for non-critical health issues. But there is a significant pattern among socio-economic groups that is alarming and can lead to a less healthful workforce.
People who make more money tend to limit their visits to emergency rooms for less urgent needs. However, people in low wage positions are less likely to go to the emergency room for serious conditions including asthma and heart disease. From a health point of view, this is not a good use of the insurance. Economically, an employer could pay more in the long run when their employees need additional care due to delays in seeking vital health treatment.
Most medical practices run standard tests for diagnostic procedures. When patients have a high deductible health plan, costs can quickly add up. Unless a physician is willing to seek out less expensive options with their patients, even those with insurance may be unable to afford medical care. The lower-cost health insurance provider must be willing to work with physicians to seek out alternative methods of treatment and diagnostic procedures or risk bankrupting their customers when a medical intervention is needed.
High deductible health care plans work well for many consumers. Lower wage workers can request that the employer contribute to an HSA so that they are able to afford ongoing health needs. Keeping costs down and the quality of medical care up is a balancing act that many companies are working on.
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