High Deductible? Try Low Premium!

10 Aug High Deductible? Try Low Premium!

1. Something, such as an expense, that can be deducted, as for income-tax purposes.
2. A clause in an insurance policy that exempts the insurer from paying an initial specified amount in the event that the insured sustains a loss.

I didn’t really realize that I was such a stickler for words and the definitions of words. However, perhaps as a result of writing this blog (with my signature of having a definition to lead off each entry), I have become a novice wordsmith of sorts. I have also clearly been influenced by my recent reading of the Founding Fathers and their amazing use of the English language to playfully, persuasively, and powerfully make their point. Words do matter.

I have been working a lot with health plans who are attempting to offer a “Consumer-Directed” (see my previous take on this phrase) High Deductible Health Plan along with the associated benefits of Health Saving Accounts to “healthcare consumers” (by the way, this term is ahead of its time!). The general concept and convergence of “Health and Wealth” is a pretty hot sector right now, and we are leading the creation of an entirely new category called Personal Healthcare Financial Advisory Services (more on this later). I have discussed the need and requirement for Advisory Services before, both from a physician perspective as well as a healthcare services perspective. I believe that those individuals and company’s who can create value added, consultative, and useful services in literally demystifying the healthcare fog will have plenty of opportunity in the future.

However, in attempting to explain the value and benefits of HSA’s (and the underlying philosophical basis of healthcare consumerism), I have noticed how difficult it is to explain the concept of a “High Deductible” Health Plan. Despite my eloquent, succinct, and cogent explanation of the concept, the typical banter is this:

You: “You mean I would have to pay for my doctors visit out of my pocket up to my deductible? What about my $10 co-pay?”
Me: Dude, what about your $1,000 per month premium?
You: (glazed eyes, open mouth, and cognitive flatline)

The whole notion of “high-deductible” is a misconception – why not change the paradigm by saying “Low-Premium” Health Plan (LPHP). The point is that the we are talking about insurance – you are buying risk protection from someone who is willing to assume it in exchange for your money. The more risk you want to avert, and the lower co-payments you want, the higher your monthly premium is going to be. If you are willing to go at risk, up to a defined level ($5,000 my case), you can save dramatically on your monthly insurance premiums. In addition, as you play the numbers out, your overall spending can also be 15-20% less with a LPHP over a traditional plan. This doesn’t even account for the behavior change that occurs when you are spending your own money and therefore become engaged in the decision making process.

Sidebar: For anyone out there who can add numbers, I would like to know why you are NOT in a LPHP.

It has now become somewhat of a perverse game for me, that when the bald face numbers and Ross Perot style charts don’t do the trick, to see what type of analogy can push them over the hump to an entirely new vista of understanding the health and wealth connection. I have been successful turning the corner with several people, in fact, some of who become impressive champions of consumerism in their own right. However, more often than not, my passionate attempts to explain, that the false sense of security of paying high premiums for low co-payments is contributing to the lack of responsibility in healthcare, which in turn, translates into a lack of fiscal responsibility as well, fails to penetrate the thickly ingrained walls of outsourced health responsibility.

Whether you believe it or not, our collective lack of healthcare engagement is contributory to a decline in our overall global competitiveness as a country. Americans are a hard working people who value their freedom and the inherent responsibility that comes with that freedom. For some strange reason, we have chosen to abdicate our healthcare responsibility to conflicted third parties (health plans, employers, etc) wherein we proverbially cross our fingers and hope for the best. I believe that we need to continually, persuasively, and powerfully seek ways to bring additional innovation to the delivery and financial mechanisms of healthcare, while encouraging Americans to personally get back in the healthcare game.

Low Premium Health Plans are one way, among many others, to transfer the responsibility of managing healthcare back to the American people. Assuming this responsibility can bring a concomitant and incredible sense of freedom – to once again be in control of both your health and ultimately your wealth. Hopefully, these concepts can be deduced through the “deductible” conversation.