Texas Tech University Health Sciences Center
Deductible Dilemma

Deductible Dilemma

ceo_minuteWelcome to 2015! I sincerely hope that 2015 is a good year for you and your family, as well as for Texas Tech Physicians. For many, insurance deductibles are top of mind at the start of a new calendar year.

The issue of rising deductibles is becoming more prevalent in the news these days, due in part to the emergence of the high deductible health plan (HDHP), also known as a consumer driven health plan. These plans were initiated in response to a projected 6.5% increase in health-care costs in 2015. An HDHP is a health care plan offering lower premiums and higher deductibles for major care such as hospitalization or surgery. These plans are often combined with a health savings account. Experts theorize that higher deductibles, while beneficial to employers, cause people to think twice about seeking medical care for minor things. Many argue that with so much out-of-pocket prior to the deductible being met, it makes insurance coverage less meaningful.

For some, simply having a deductible is a change. The Kaiser Family Foundation reports that the portion of workers with annual deductibles rose from 55 percent eight years ago to 80 percent today, and the average deductible more than doubled in eight years, from $584 to $1,217 for individual coverage.

As you know, a deductible is the dollar amount that an insured person must pay a provider before the health insurance company begins paying, minus copayments. Many health insurance plans feature deductibles running from January 1 to December 31, although, some plans are based on a benefit year instead. For example, HealthSelect administrated by United Healthcare, which covers many of us at TTUHSC, has a plan year from September 1 to August 31. Deductibles vary from none to several thousand dollars and have a huge influence on the amount of the premium, which is the cost of the actual policy. In general, the larger the deductible, the less expensive the policy costs up front. However, with much higher deductibles, individuals are paying larger and larger amounts out of pocket, making it seem like they don’t have insurance until they have met the amount of the deductible.

In any case, the emerging popularity of HDHPs hold patients responsible for a greater share of their medical care costs, thus generating the need for increased effort on the part of Texas Tech Physicians to ensure that all required funds are collected from the patient. It is immensely popular to criticize insurance companies for some of their payment habits. However, keep in mind that collecting payment from individuals is equally if not more challenging.

With this in mind it becomes increasingly valuable to the practice for us to help educate our patients on how to understand their deductibles and what their responsibility is towards meeting them. This ensures that the practice is able to receive the payment it is entitled to, as patients may be used to insurance covering more of the cost up front.