High-Deductible Health Plans: What Patients Need to Know
High-deductible health plans (HDHPs) are an increasingly popular type of health plan, especially for employer-sponsored plans. Get key insights from our recent webinar "High-Deductible Health Plans and Patient Affordability to Care." And learn how these health plans work and the risks they can pose for cancer patients, survivors, and those at high risk for cancer.
During the webinar, speakers Cynthia Cox of the Kaiser Family Foundation, Myra Simon of Avalere Health, and Kollet Koulianous of the National Hemophilia Foundation discussed how critical it is for patients with a chronic or complex illness to understand the costs associated with HDHPs. As Cynthia said, people with a HDHP “are on the hook for higher health care costs annually, creating more barriers to care.”
What Is a High-Deductible Health Plan?
A HDHP is a health insurance plan that usually has lower monthly costs (called a premium) but also has a high deductible. A deductible is the amount of medical expenses you must pay on your own (known as out-of-pocket costs) before your insurance plan starts to pay.
In 2022, a HDHP is defined as any health plan that has a deductible of at least $1,400 for individuals and $2,800 for families. This means that patients will have to pay at least that amount before their health plan will begin to pay their share. However, many HDHPs have deductibles higher than this amount.
Pros and Cons of HDHPs
Despite having a high deductible, HDHPs are often attractive because they have lower monthly premiums than traditional health plans. Also, certain preventive services, such as mammograms and colonoscopies, are exempt from deductibles, and plans cannot charge enrollees for these services.
Additionally, HDHPs are frequently combined with health savings accounts (HSAs). HSAs allow enrollees to put aside tax-free dollars for medical expenses. If paired with a HSA, you can pay your deductible and other medical expenses using money you set aside in your tax-free HSA.
HDHPs are not appropriate for everyone, especially not for cancer patients, survivors, and those at high risk for cancer. For example, if a patient needs additional testing to determine if they have cancer, these tests are often not considered preventive. So, you’d pay the full price until your deductible is met. And if you need care for a serious medical condition, like cancer, costs for tests and treatments can add up quickly, which could mean you are paying thousands of dollars in medical bills. A recent study found that cancer patients enrolled in a HDHP paid much higher out-of-pocket costs compared to cancer patients with traditional health plans (Fu et al., 2021). For patients and families facing these high bills, this may lead to financial hardship and is especially burdensome for patients with lower incomes. It may mean that people choose to delay, or even forego, their care.
“Most people don’t understand basic terms or features of health care plans and instead look for the lowest cost premium, only to be hit later with high costs to meet their deductible. These deductibles are absolutely unmanageable for most households.”
— Kollet Koulianous, "High-Deductible Health Plans and Patient Affordability to Care"
During our webinar, Cynthia explained that HDHPs are designed to reduce costs by making enrollees think twice about seeking care. This may discourage people from going to their doctor or pursuing preventive measures to protect their health.
What to Keep in Mind When Choosing a Health Insurance Plan
When selecting a health insurance plan, research what the plan covers, and what it doesn’t. It’s important to consider all the costs associated with the plan and what you’ll be responsible for. Don’t just look at the monthly premium costs, but what you’ll be required to pay should you get a serious diagnosis or illness. Consider if you’ll be able to afford such a fee all at once. It may be better to choose a plan that has a balance of costs and benefits.
“High-deductible health plans require careful financial planning, especially around the first of the year.”
— Myra Simon, "High-Deductible Health Plans and Patient Affordability to Care"
Important questions to consider include:
- Do the doctors, hospitals, and pharmacies I prefer fall within the plan’s network?
- How much will I pay for the monthly premium?
- What is the plan’s deductible?
- What other costs may I be required to pay to access care?
- Are my prescriptions covered by the insurance plan?
- Do I mind getting a referral to see a specialist?
For people who have been impacted by cancer, the Cancer Insurance Checklist is a useful tool that can help you compare the benefits and costs of every plan. You can use this checklist on your own or you can talk about your health care needs with a care provider, a navigator, or loved ones.
Fu S.J., Rose L., Dawes A.J., Knowlton L.M., Ruddy K.J., Morris A.M. (2021). Out-of-Pocket Costs Among Patients With a New Cancer Diagnosis Enrolled in High-Deductible Health Plans vs Traditional Insurance. JAMA Netw Open.