Magazine article Clinical Psychiatry News

Do High Deductible Plans Coupled with HSAs Promote Underinsurance? Consumer-Directed Care Cuts Bureaucracy

Magazine article Clinical Psychiatry News

Do High Deductible Plans Coupled with HSAs Promote Underinsurance? Consumer-Directed Care Cuts Bureaucracy

Article excerpt

In fact, high-deductible plans solve the problems of "underinsurance" and "overinsurance" and lead to "just-right insurance."

Most economists recognize that excessive reliance on third-party payment is the source of many of our problems in health care. When everything is paid for by a third party, consumers lose all interest in or knowledge of the cost or value of the care they consume. This leads to enormous waste. By some measures, 30%-50% of health care services provided in this country are unnecessary and in some cases downright harmful.

Third-party payers react by rationing the care they cover. Such rationing may involve waiting lists, underpayment of care, reduced number of providers, or outright denials of care. These tactics amount to depriving people of the care they want to have and feel they need.

Third-party payment also adds administrative costs, both for the insurer and the caregiver, to what should be simple, routine services. A dollar's worth of premium will often buy just 50 cents worth of care.

High-deductible plans reduce the amount of money that is lost to the insurance company every month, and health savings accounts allow people to take that same money and use it for the care they need and want to have. …

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