Women confront risks of high-deductible plans
Cost of reproductive care, lower incomes affect their financial comfort level
SAN FRANCISCO (MarketWatch) -- Women long have proved more risk-averse than men in surveys that measure investing attitudes and behavior. Could they also show a preference for traditional health plans over newfangled ones that expose them to higher risk of out of pocket costs?
There is little research on the notion so far, though several studies point to potentially higher costs for women, especially where maternity care is concerned. A recent analysis from the Kaiser Family Foundation found high-deductible plans often translated into large out-of-pocket costs for a variety of pregnancy scenarios.
In April, researchers from Harvard Medical School found that high-deductible plans penalize women financially. Last year, health costs for working-age women were about $1,000 higher than for men, or $1,844 compared with $847 on average, the study found. Young adults age 18 to 44 showed a particularly wide gap, with women's median outlays nearly three times higher at $1,266 vs. $463.
High-deductible plans make a single insured person responsible for at least the first $1,100 of out-of-pocket medical costs up front. High-deductible family plans start at $2,200, though deductibles often run much higher.
Some high-deductible plans are paired with savings vehicles, such as health savings accounts or HSAs. Under IRS rules for HSA-eligible plans, annual out-of-pocket expenses excluding premiums can't exceed $5,600 for self-only coverage or $11,200 for family coverage.
Women under 50 often seek more medical care than men because of planned or unplanned pregnancies, said Diana Zuckerman, president of the National Research Center for Women & Families, a nonprofit think tank in Washington. Still, other health risks increase after the childbearing years end, she said.
The trend toward higher deductibles is "worrisome," especially for women, Zuckerman said. They are often primary caregivers for children, earn less money than men and may be in more precarious financial situations if they're single or divorced.
"A lot of times the people who can least afford the risk are the ones getting these policies hoping they stay well, and when they don't obviously it's better than nothing, but it can be a huge financial burden on people who just don't have any excess money to spend," she said.
"For a lot of people it's not a lot better than nothing because a $5,000 deductible means they can't live in their house anymore."
Pam Noonan-Saraceni, 54, isn't as enthusiastic about the changes she's made since signing up in April for an individual policy with a $10,000 deductible and $400 monthly premium. That deductible is misleading, she said, because if she were to reach $10,000, her Assurant Health plan would require her to cover 50% of the next $7,500 in medical expenses. Plus, she's on the hook for the first three days of inpatient hospital care, amounting to $750 a day in her Cody, Wyo., area, and her plan refuses to pay for her cholesterol-lowering prescription drug.
As a former breast-cancer patient who paid out of pocket for two $3,000 MRI tests last year under a $5,000-deductible policy when she was living in Connecticut, Noonan-Saraceni said she's already a wise consumer.
"I'm not a person that goes to the doctor every time I get a cold," she said. "If I had good health coverage and I got a cut on my finger that I thought looked infected, I'd go to the doctor. Being that I have to pay $100 to go to the doctor, I stop and think before I go. I don't think that's a good thing."
While she and her husband are fortunate to be able to absorb a sizable hit if she had a medical emergency, Noonan-Saraceni said she's looking for a full-time job to avoid the hassle of finding more-comprehensive, affordable coverage until she's eligible for Medicare, which is more than 10 years off. "I have to have some coverage, and the high deductible is what we can deal with now. But I should have better coverage, and I know that."
The article does continue after that. But I think it's more important to make two points.
First, this gives people disincentive to seek primary care. Our health system has far too many specialists and too few primary care doctors. We don't think of primary care as the thing to see the doctor for. But we need to. And, unfortunately, people on high deductible plans are only going to see the doctor when a problem that might have been caught earlier turns severe. Certainly, a lot of the uninsured end up waiting until it's bad enough that they seek care in the ER. ER visits are very, very costly for payers, like insurance and Medicare/aid, and they aren't profitable for the hospital, either.
Secondly, women in general have a higher disease burden than men, especially for chronic diseases. This was alluded to in the article. I think that part of the reason these high deductible things came into popularity is because of the tax dodge you can take with the health savings account. You can deduct your contributions, the money is tax free if used for medical care, and after 65, it can be withdrawn for any purpose, except that if not for medical purposes it will be taxed as regular income.