In June 2012, the United States Supreme Court upheld the Affordable Care Act, bringing with it countless cheers, jeers and quite a few misconceptions. While the law will not insure all Americans, it does mandate that both private and public insurance plans be extended to cover up to 20 million of the previously uninsured, including employees of small businesses, those with pre-existing conditions who may not qualify for public programs and just-out-of-college folks yet to find full-time work with benefits.
One of the more controversial aspects of the law is the individual mandate, in which those without insurance after 2014 will be assessed a fee (regardless of its status as a "tax" or "penalty"). With a new influx of insurance candidates, costs likely will rise dramatically. The United States already has the highest amount of spending allotted to health care, both in terms of actual dollars ($2.6 trillion) and as a percentage of GDP (16%) (Kaiser.edu). There has been exponential rate of growth over the past several decades and costs are projected to increase even more with an aging population becoming increasingly dependent on the health care system.
High-Deductible Health Plan: The Basics
In 1988, 73 percent of employment-based health care coverage was through "traditional" plans, 16 percent through health management organization (HMO) plans and 11 percent through preferred-provider organization (PPO) plans. By 2009, only 1 percent was represented by traditional health plans, 20 percent by HMO plans, 60 percent by PPO plans and 10 percent by point of service (POS) plans. In addition to these four options, 2006 saw the first measurable statistics for high-deductible plans, representing 8 percent of employment-based insurance plans by 2009 (Kaiser Slides, 2009). It is estimated that today, nearly half of all workers in small businesses have high-deductible plans. (Kulkarni, 2012). A changing landscape, indeed.
High-deductible health plans, also referred to as consumer-directed plans, are fairly simple. Consumers pay very low premiums with very low employer contributions, but pay fees when visiting the doctor. These patients still pay a small premium to the insurance company in exchange for use of "negotiated" pricing with doctors and pharmacists, but this amounts to a small fraction of the hundreds of dollars in premiums that may be owed in a more traditional plan.
By law, high-deductible plans provide free access to vaccines and check-ups. But beyond that, the insurance company does not cover much. Plans have a varying deductible – often in the thousands of dollars – that patients are responsible for before the insurance company begins to cover anything. Even after the deductible is met, the patient may still owe some payment-per-procedure through co-insurance, though patients will not be on the hook for the entire bill. There is a cap on total spending, as mandated by law, at $6,050 for an individual and at $12,100 for a family (Kulkarni, 2012).