During the first 6 months of 2009, enrollment in high deductible health plans, HDHP’s, for those under age 65  was 22.7%. For comparison, in 2007 17.5% of individuals were enrolled in a HDHP.

For nearly one quarter of those with insurance, the choice to enroll in a HDHP was the lower cost of monthly premiums.  Nearly 50% of those who purchase health insurance themselves (not offered by their employer) also enrolled in a HDHP.

When an individual has a HDHP, they are responsible for higher out of pocket medical expenses. INSNET is available to assist those who are looking to save money on their medical bills.  Any medical bill with a patient balance exceeding $200 is eligible to be sent for risk free medical bill review and negotiation. INSNET charges a percentage of the amount saved, with no fee if there is no savings.

Critics of high deductible plans often state the reason cost decrease is due to the high out of pocket costs. They say that people are foregoing treatment because they cannot afford it. This study states that the level of preventative care, chronic diease management and evidence-based treatments were higher than those enrolled in PPO and HMO health plans.

The study further states that 18% of Americans are covered under a high deductible health plan. If this amount rose to 50% (it is increasing each year due to lower monthly premiums), the United States could achieve $350 billion dollars in savings over a 10 year time period.

High deductible health plans and Health Savings Accounts need to be in the forefront of discussions about health reform. More people can afford coverage (decreasing the number of uninsured), no taxes will be raised and medical costs will decrease. Isn’t that what reform should be about?

This study may take some of the political sting out of the debate about HSA’s. Democrats contend that HSA’s are just a way for the rich to store and keep more of their money from Washington. The study shows that 70% of the respondents earn less than $75,000 per year.

America’s Health Insurance Plan recently reported that 8 million Americans are now insured through a health savings account. This figure is up from 6.1 million in 2008. The AHIP study reports that almost half of the accountholders have a median income of $50,000 per year.

A typical American household of four enrolled in a ppo plan spends $2,820 per year in out of pocket medical expenses according to the Milliman Medical Index. Many studies show the premiums for a high deductible health plan which must accompany a health savings account have much lower premium costs than ppo plans. With a HSA you can choose the deductible you want, or the premium you can afford.

Many are  concerned that with a high deductible plan you will pay more in out of pocket expenses. That’s where professional medical bill negotiators like INSNET help individuals. They provide risk free medical bill review and negotiation. They charge a percentage of the amount saved on your medical bill, with no fee if there is no savings.

There are certainly many facets involved in healthcare reform, but empowering individuals to attempt to control their own costs certainly makes sense to me.

Many employers now offer high deductible health plans. These plans are unlike many HMO plans where a patient pays small co-pay amounts for doctor visits, hospitalizations and prescription drugs. With high deductible health plans, the patient is responsible for paying medical expenses from dollar 1. The cost savings for the employer and employee for this type of coverage is significant, and could save as much as 30%. If the employer has set up a Health Savings Account they can fund the savings realized from the lower premiums into the accounts for their employees to use.

Here’s an example: A small business with 50 full time employees offers an HMO health plan. The annual premium cost is $325,000, of which the employer pays 75% or $243,750, the employee pays the balance, which is taken out through payroll deductions. Under the HMO plan the patients pay:

$15 doctor office visit co-pay

$250 out patient hospital co-pay

$500 in patient hospital co-pay

$15/$25 prescription drug co-pay

To attempt to lower costs, the employer changes to a high deductible health plan and HSA for its employees. With the patient responsibility starting a dollar 1, the premiums are less expensive. The same 50 full time employees can be insured with a high deductible health plan for $235,000. This savings is in excess of 25%. The employer can use the premium savings and fund $1,500 into each employee’s HSA. Health insurance will pay for any expenses once the deductible has been met. Now that employees are paying for healthcare from funds in their own account, they are more likely to shop for a better price, making them better healthcare consumers.

Smart employers will supply their employees with tools to ensure they make smart decisions for themselves. Access to wellness programs, prescription drug discount programs, discount lab and screening centers and medical  bill negotiators all help patients reduce what they pay on their medical bills.

Finding health insurance for those who really are in need is a challenge. For those who simple choose to put their money elsewhere, high deductible health plans provide an opportunity for those to have some peace of mind that catastrophic medical bills will be paid for.

Just eight years ago only half of the PPO plans even required a deductible, and then it was just $250.  Currently 79% of plans require a deductible be met before insurance pays.  Mercer contends that the startling revelation of this study is this increase refers to traditional PPO plans, not CDHP’s which require a deductible of at least $1,100 for individuals.

In these tough economic times, employers are looking to reduce costs.  Premium costs go down the more the deductible goes up.  In order to reduce costs, employers can raise deductibles.  According to Blaine Bos, a worldwide partner at Mercer “Raising the deductible has become a fallback for employers faced with cost increases they can’t handle.  It’s the easiest way to reduce cost without taking more out of every employee’s paycheck.”

Another way to reduce costs is to change the type of health plan offered.  The cost per employee in a PPO plan for 2008 was $7,815 compared to $6,207 for employees enrolled in CDHP’s.  “The introduction of the HSA may have changed employer’s thinking on just how high a deductible can go without causing employees to revolt” said Bos.

Whether it’s an increase in PPO deductible or change to CDHP’s, employees will not see any change to their checkbook until the time comes to pay their doctor bill and suddenly they realize they are paying more before their insurance pays due to higher deductibles.

What was also encouraging in the report was that consumers enrolled in CDHP’s had a higher utilization of preventative care than consumers in non CDHP’s. Males were more likely to utilize preventative care with a CDHP than females.  This is encouraging because health experts have observed males go to the doctor less frequently than females.

The choice of a health insurance plan is a personal decision based on your individual health and financial situation.  Some consumers find the savings in monthly premium with a CDHP will offset the costs involved with a higher deductible.

The offering of HSA’s by employers should not be viewed negatively as this article suggests. HSA’s empower employees and consumers by offering the freedom to choose when and where they receive their healthcare. HSA’s are growing in popularity at a rate of 20-30% a year. Currently 12 million American lives are insured with HSA’s. HSA’s provide a way for both the employer and employee to save money.

Premiums for high deductible health plans which must accompany a HSA are less expensive than traditional insurance. Employers (who pay the bulk of the premium cost for employees) choose this option to save money, and in the case of self-funded companies, to fix costs. Many employers fund their employees HSA accounts the difference in the amount saved in premium cost from changing to a high deductible health plan. Employees can also contribute pre-tax money into their HSA account, which are not taxed. When an employee or member of their family incurs a qualified medical expense, they pay for the treatment out of their HSA. When the employee pays for the medical treatment the withdrawal is not taxed as long as it pays for a qualified medical expense. The amount of money an employee has in their HSA rolls over year to year and can be invested in a variety of ways.

As the NY Times article details, HSA’s are not ideal for everyone, but what health plan is? Does it make sense for a young healthy family to pay over $1,000 a month in health insurance premiums just so they can pay a $20 co-pay when they go see their doctor? With a HSA, the monthly premium amounts drops tremendously and you pay $125.00 for the yearly visit out of your HSA.

If your employer allows you the choice between traditional insurance and HSA’s I recommend looking at the details of each plan. Patient advocates such as INSNET are always available no matter what type of health plan you elect.