Introduction
A woman from Cleveland, Sarah Monroe, accumulated over $13,000 in medical debt four years ago following a heart condition diagnosis during a twin pregnancy. This debt occurred while she was insured by a high-deductible health plan (HDHP) through her employment.
High-Deductible Health Plans and Republican Advocacy
High-deductible health plans require patients to cover significant costs out-of-pocket before insurance coverage commences. These plans have become prevalent over the past two decades.
Republican legislators, including former President Donald Trump and Senator Bill Cassidy (R-La.), have expressed support for expanding HDHPs, often paired with Health Savings Accounts (HSAs). These proposals are discussed as alternatives to government subsidies provided through the Affordable Care Act (ACA). Specific proposals include providing direct cash to individuals for special healthcare accounts, to be used with HDHPs available on ACA marketplaces. Senator Cassidy has stated that this approach "empowers the patient to lower the cost," and former President Trump has advocated for "sending the money directly back to the people."
Economic Rationale and Outcomes
Conservative economists and GOP lawmakers have historically argued that patient financial responsibility, or "skin in the game," encourages individuals to seek more cost-effective and higher-quality care. Shawn Gremminger, who leads the National Alliance of Healthcare Purchaser Coalitions, observed that this intended outcome "largely has not been the case."
Since the introduction of HDHPs, nearly all health plans now incorporate a deductible. The average deductible for a single worker with job-based coverage has increased to approximately $1,700, a significant rise from around $300 in 2006. Plans with deductibles exceeding $1,650 are eligible to be paired with tax-free HSAs.
Despite the widespread adoption of deductibles, medical prices in the U.S. have continued to rise. For instance, the average cost of a knee replacement increased by 74% between 2003 and 2016.
A 2022 survey indicated that approximately 100 million individuals in the U.S. carry some form of healthcare debt, with the majority being insured.
Challenges with Price Shopping and Patient Impact
Monroe stated that her HSA savings were insufficient to cover her medical expenses. She also found price shopping for medical care impractical given her complex pregnancy and heart condition, opting instead for a large health system due to perceived medical risk management.
Research from the Health Care Cost Institute suggests that only about 7% of total healthcare spending for individuals with job-based coverage is for services that can realistically be price-shopped. Dr. Fumiko Chino, an oncologist, also noted the impracticality of expecting patients with serious conditions like cancer to compare prices for complex treatments within critical timeframes.
A study presented by Dr. Chino and other researchers at the American Society of Clinical Oncology found that cancer patients with HDHPs exhibited a higher mortality rate compared to similar patients without such coverage.
Monroe's personal financial situation deteriorated, resulting in a change of residence, depleted savings, a lowered credit score, and vehicle repossession. She characterized the HDHP model as unsustainable.