The Risks of High Deductible Plans

We have provided past guidance to healthcare consumers regarding the financial risks associated with high deductible health plans. These health plans were intended to be paired with health savings accounts (HSAs) which would allow the consumer to save money on a pre-tax basis to pay for their annual healthcare out-of-pocket costs.

Unfortunately, only a small fraction of consumers with high deductible plans actually has an HSA. In a recent post, we have highlighted recent data that showed the buildup of $88 billion in medical debt. The link below documents the result of this situation by indicating that the majority (58%) of hospital bad debt now relates to the out-of-pocket costs of insured patients. This confirms that many healthcare consumers are selecting the wrong health plan for their circumstances.

https://www.healthcarefinancenews.com/news/high-out-pocket-costs-are-negatively-affecting-revenue-cycles#.Yw-iWN_h53U.linkedin

Did you know that Medicare Drug Supplemental Insurance plans can raise your drug prices within a month after you have already selected and locked in your plan for the upcoming year?

NPR, just highlighted in their article “Drug plan prices touted during Medicare open enrollment can rise within a month” that consumers of Medicare Drug Supplemental Insurance (Part D) Plans have to select their plans in December for the next calendar year; yet the pricing for many commonly used drugs can increase as early as the following January.  This situation makes it impossible to have any confidence in the health plans pricing information, or ultimately how much the consumer will pay out of pocket for their prescriptions.  

And, unfortunately this scenario isn’t isolated to Medicare.  This is true of any health insurance plan.  Drug companies, insurance companies, and pharmacy benefit managers are in constant negotiation with drug pricing and individual prices can fluctuate without notice.  However, the insured is not able to change plans based on these fluctuations because they have signed a contract for their premium rates.  

It is an incredibly frustrating situation that many Americans find themselves in, and the problem is growing. 

At Health Care Big Ideas, we want to empower you to become a more savvy consumer of healthcare.  Check out our FREE GUIDE to learn how to make smart healthcare decisions and financial decisions. 

The Consumer Financial Protection Bureau Targets Medical Billing: Yet Another Resource For Healthcare Consumers

The Consumer Financial Protection Bureau (CFPB) recently issued a report entitled “Medical Debt Burden in the U.S.” which indicates that approximately 20% of American households have an estimated $88 billion in medical debt.  This medical debt appears on approximately 43 million credit reports and represents 58% of all consumer debt in collections agencies.

The CFPB’s study found that when medical debt is included in credit reports, consumers have reduced credit access and a higher risk of bankruptcy.  It can also negatively affect their ability to get a job and access future medical care.  This is especially acute in marginalized populations.

The CFPB is challenging the appropriateness of medical debt even being included in credit reports.  The CFPB charges that the current fee-for-service billing system is comprised of complicated insurance coverage rules; and subject to opaque pricing and common billing errors.  This action is both good news to healthcare consumers and bad news to medical providers stuck in the quagmire that is the fee-for-service billing system. 

Healthcarebigideas.com Empower Bundle describes many of the scenarios where large medical bills can arise and provides you with the resources to better understand your medical bills and resolve your outstanding medical debt. The CFPB is yet another resource for healthcare consumers to turn to for assistance when addressing their medical debt.