Republicans push high deductible plans and health savings accounts : Shots

Sen. Bill Cassidy, R-La., speaks during a hearing in Washington, DC. Cassidy proposed sending government funds to Americans’ health savings accounts instead of subsidizing insurance premiums for beneficiaries of ACA plans.

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Sarah Monroe once led a relatively comfortable middle-class life.

She and her family lived in a nicely landscaped neighborhood near Cleveland. They had a six-figure income and health insurance through his job. Then, four years ago, when Monroe was pregnant with twins, something started to feel wrong.

“I was constantly having to go to the emergency room due to fainting spells and other symptoms,” recalls Monroe, 43, who works for an insurance company.

The babies were fine. But after months of tests and hospitalizations, Monroe was diagnosed with a potentially dangerous heart condition.

It would be expensive. In less than a year, while juggling a serious illness and two newborns, Monroe found herself buried under more than $13,000 in medical debt.

This is partly because, like tens of millions of Americans, she had a high-deductible health plan. People on these plans typically pay thousands of dollars out of pocket before coverage kicks in.

These projects, which have become common over the past two decades, are receiving renewed attention thanks to President Donald Trump and his Republican allies in Congress.

Many Republicans are reluctant to expand government subsidies that help cover patients’ medical bills and insurance premiums through the Affordable Care Act.

And although Republican Party leaders have yet to unite around an alternative, several prominent Republican lawmakers have proposed that Americans who don’t have insurance through an employer should get money in a special health care account, coupled with a high-deductible health plan.

In such an arrangement, someone could choose a plan on an ACA marketplace that costs less per month but comes with an annual deductible that could exceed $7,000 for an individual plan.

“It’s the patient who makes the decision,” Sen. Bill Cassidy, R-La., said at a recent hearing. “This saves costs for the patient.”

In an article on Truth Social last month, Trump said: “The only health care I will support or approve of is sending the money directly back to the people.” »

“Skin in the game”

Conservative economists and Republican lawmakers have been making similar arguments since high-deductible health plans began becoming more widespread two decades ago.

At the time, backlash against the limits of HMOs, or health maintenance organizations, led many employers to enroll their workers in these plans, which were supposed to empower patients and control costs. A change in tax law allowed patients in these plans to set aside money in tax-free health savings accounts to cover medical expenses.

“The idea was that if a consumer had ‘skin in the game,’ they would be more likely to seek higher-quality, less expensive care,” said Shawn Gremminger, who leads the National Alliance of Health Care Buyer Coalitions, a nonprofit organization that works with employers who offer health benefits to their workers.

“The sad reality is that this has largely not been the case,” Gremminger said.

Today, almost all health insurance plans have a deductible, with the average for a single worker with workplace coverage approaching $1,700, up from about $300 in 2006.

Plans with deductibles exceeding $1,650 can be combined with a tax-free health savings account.

But even as deductibles became more widespread over the past 20 years, prices for medical care in the United States have skyrocketed. The average price of a knee replacement, for example, increased 74% between 2003 and 2016, more than double the overall inflation rate.

At the same time, patients are left with thousands of dollars in medical bills that they cannot afford, even though they have health insurance.

About 100 million people in the United States have some form of health care debt, according to a 2022 survey.

Most, like Monroe, are insured.

Shopping for medical prices is not easy

Even though Monroe had a health savings account associated with her high-deductible plan, she was never able to save more than a few thousand dollars, she said. It wasn’t enough to cover the big bills when her twins were born and when she became seriously ill.

“It’s impossible, I tell you, impossible to pay the medical bills,” she said.

There was another problem with his high-deductible plan. Although these plans are supposed to encourage patients to shop around for medical care to find the lowest prices, Monroe found it impractical when she had a complex pregnancy and heart problems.

Instead, Monroe chose the largest health system in its area.

“I opted for that one as far as medical risk,” she said. “If something were to happen, then I could be transferred within this system.”

Federal rules that require hospitals to list more of their prices may make comparing facilities easier than before.

But unlike a car or a computer, most medical services remain difficult to purchase, in part because they arise from an emergency or are complex and may span many years.

Researchers at the nonprofit Health Care Cost Institute, for example, estimated that only 7 percent of total health spending among Americans with occupational coverage was for services that could realistically be purchased.

Fumiko Chino, an oncologist at MD Anderson Cancer Center in Houston, said it doesn’t make sense to expect patients with cancer or other chronic illnesses to compare prices for complex medical care such as surgeries, radiation or chemotherapy after being diagnosed with a life-threatening illness.

“You won’t be able to do it effectively,” Chino said, “and certainly not in the time frame you would need when faced with a cancer diagnosis and the impending need to begin treatment.”

Drowning in bills

Chino said patients with high deductibles often face a flood of huge medical bills that lead to debt and a cascade of other problems.

She and other researchers found in a study of more than 8,000 cancer patients presented last year at the American Society of Clinical Oncology that cancer patients with high-deductible health insurance were more likely to die than similar patients without that type of coverage.

For her part, Monroe and her family were forced out of their home and into an 1,100 square foot apartment.

She emptied her savings. His credit score plummeted. And his car was repossessed.

There were other sacrifices too. “When families can have good Christmases or go on spring break,” Monroe said, that’s often not the case for hers.

She is grateful that her children are healthy. And she continues to have a job. But Monroe said she couldn’t imagine why anyone would want to double down on the high-deductible model for health care.

“We have to do it differently,” she said. “We can’t treat people this way.”

KFF Health News is a national newsroom that produces in-depth journalism on health issues and is one of the major operating programs of KFF.