3 million Californians use high-deductible health plans
The UCLA Center for Health Policy Research says 3 million Californians are enrolled in high-deductible health plans – which are often the only insurance the self-employed or those with low incomes can afford.
According to the center's new report, "Profiling California's Health Plan Enrollees: Findings from the 2007 California Health Interview Survey," these health plans, which can impose deductibles of more than $5,000, may cause members to delay care and can put families in financial jeopardy should a health crisis arise.
The report, which profiles California's nearly 32 million insured residents, found that 3 million commercially insured Californians were enrolled in high-deductible plans in 2007. Enrollment is particularly high among members of preferred provider organizations – 28 percent of all commercial PPO members reported having a deductible higher than $1,000.
Among commercial health maintenance organization plan members, 14 percent reported having such plans.
High-deductible plans, defined by the California Health Interview Survey as plans that have out-of-pocket deductibles of $1,000 or more for individuals or $2,000 or more for families, can exceed $5,000 annually.
"Many Californians can't afford higher-premium plans, especially in the current economic climate," said the report's lead author, Dylan Roby, a UCLA research scientist. "But the alternative – high-deductible plans – may cost less initially, but can cost thousands of dollars when you need healthcare. When that much money is on the line, a health emergency can also become a financial emergency."
The findings have significance as the state establishes a California Health Benefits Exchange to provide insurance to the state's uninsured as part of national healthcare reform. Per federal law, this exchange will offer more robust health coverage options while capping out-of-pocket deductibles at $2,000 for individuals and $4,000 for families and offering subsidies for those with low-incomes.
"The insurance exchanges may offer a lifeline to individuals and families by establishing reasonable out-of-pocket maximums for families to pay," Roby noted.
He said lowering deductibles is especially important for California's low-income residents, as well as individuals not insured through an employer. Both groups have historically had less access to affordable coverage.
The report found that significant numbers of low-income Californians were likely to choose high-deductible health plans. Specifically, 32 percent of low-income enrollees in commercial PPOs, 25 percent of low-income commercial HMO enrollees and 24 percent of commercial Kaiser HMO enrollees reported choosing high-deductible plans.
Among the individually-insured (those who purchase commercial insurance directly through brokers, HMOs or PPOs), 38 percent had high-deductible plans, compared with 12 percent of those with employer-based plans.
High out-of-pocket costs are associated with a reluctance to seek care. For example, commercial PPO enrollees with high deductible plans were significantly more likely to delay care (20 percent) than those without high deductibles (17 percent).
And many members in high-deductible health plans had no health savings account that might help mitigate the cost of unanticipated healthcare. Among commercially insured respondents with a high-deductible plan, 69 percent of PPO members, 77 percent of HMO members and 80 percent of Kaiser HMOs members reported having no health savings account for medical expenses.
The findings demonstrate the need for expanded educational efforts to ensure that consumers understand the costs and consequences of health insurance choices, the authors said.
"Consumers need information to choose the right coverage so they receive the care when needed, not just when they can afford it," said Sandra Perez, director of the California Office of the Patient Advocate. "Thus, it is essential that a consumer have access to reliable information and helpful decision-making tools to make an informed choice when selecting a health insurance plan."
