This year I tried something new. I signed up for a high-deductible health plan. After a little research, I decided to leave my traditional health plan and opt for a consumer driven one. And this decision has made me a more conscientious consumer of health care. Here’s how it works.
On January 1, United Healthcare deposited $2,400 into my health reimbursement account. I can use this money anywhere I wish so long as the expenses are health related. I can’t buy a bag of chips with it, but I can use it for doctor’s visits, prescription drugs, and the like. Each time I transact with a health care provider, the fee is deducted from my account. Should I not use all the funds by December 31, they roll over to the next year – up to $10,000 for a family.
Here’s the incentive part. If my HRA runs dry during the year, my health care provider (United Healthcare) won’t begin paying for my doctor’s visits and drugs until I reach my deductible of $3,600. That means I have come out of pocket $1,200 before my “traditional” insurance kicks in. (1200 out of pocket = 3600 deductible – 2400 HRA deposit).
This arrangement has made us consider carefully every doctor visit, drug, and other medical expense because we really want to ensure our $2,400 lasts us throughout the year. For example, yesterday my wife took our 8 year to the doctor. She was complaining of a sore throat and running a fever. The doctor swabbed her throat (negative for strep) and prescribed an antibiotic for a sinus infection. The doctor wanted to send the swab off to another lab for additional testing – testing we would have to pay for. So we declined and saved that unnecessary lab fee (the results of the lab would not have changed the doctor’s remedy – an antibiotic).
Traditional insurance removes the incentive to make consumers savvy shoppers of healthcare. We plunk down our insurance card, fork over a small co-pay, and couldn’t care less what happens after that. If we want to change people’s behavior regarding healthcare, this arrangement has to change.
