Health insurance plans that require consumers to pay more in out-of-pocket medical expenses may have hidden costs.
As workers consider their health insurance options this fall, chances are there's one on the open-enrollment menu with a deductible of more than a $1,000.
Coverage like that is often linked to a tax-advantaged financial savings account to pay for medical expenses that fall below the hefty deductible.
More than two-thirds of employers expect to offer high-deductible plans next year, according to a survey by benefits consultants Towers Watson and the National Business Group on Health.
The premiums are typically lower than for traditional insurance, so these high-deductible plans can be appealing, especially for healthy people who don't expect to need much medical care over the course of the year.
Before you succumb to the lure of lower premiums, however, make sure you can afford to pony up the entire amount of the deductible in the event something unexpected happens that requires emergency care.
"People think they'll take the high-deductible plan so they have catastrophic care if they have a heart attack or need to be in the hospital," says Pat Palmer, founder of Medical Billing Advocates of America. "But a standard trip to the emergency room can be way beyond their deductible, up to $10,000 for simple care."
In a high-deductible plan, preventive care isn't typically subject to the deductible, but all other types of care, including emergency care, may be.
Palmer says advocates at her company, which helps consumers resolve medical billing problems, have also been encountering another problem lately with high-deductible plans: Providers not giving consumers insurance discounts they're entitled to.
Insurers and hospitals and other providers sign contracts that spell out how much the insurer will pay for various services. The contracted rate is typically significantly lower than the rate the provider would charge someone without insurance for the same service.
So, for example, if the bill is for $1,500 and the contracted rate is $800, normally an emergency department would write off the difference, Palmer says. But if the consumer is responsible for the bill because it falls within their deductible, the hospital often doesn't make the adjustment and give the consumer the discount, she says.
If the insurer were paying the bill, the error would be caught and corrected, Palmer says. "But consumers aren't educated enough to know they should receive that discount." Palmer's company often addresses this problem with providers, but consumers can check on their own as well to ensure they're getting the discounted rate that they're generally entitled to.