High-Deductible Plans Cost More For Maternity Care
Wednesday, June 13, 2007
The first study of its kind has found that families typically pay much more out of pocket for maternity care under the new high-deductible health insurance plans paired with health savings accounts that have been heavily touted by President Bush and others.
The cost difference compared to traditional employer-based health insurance is especially stark, in most cases, for women who have complicated pregnancies, according to the study released yesterday by Georgetown University and the Kaiser Family Foundation.
The study found that those enrolled in a traditional health plan for federal employees (with a $500 annual deductible and $20 co-payments for office visits) would likely pay $1,455 out of pocket for care during an uncomplicated pregnancy and delivery. That compared to $3,000 for families in a high-deductible plan for federal employees and $7,000 for a high-deductible plan offered through small businesses.
The gap generally widens with pregnancies that require more expensive care or longer hospital stays. For example, a woman who delivered by Caesarean section in an otherwise uncomplicated pregnancy would likely pay $2,244 in out-of-pocket costs under the traditional plan, $3,545 under the federal high-deductible plan and $7,688 under the small-business plan. In addition, routine prenatal care often is not covered as preventive care in high-deductible plans, the study found.
"If you are contemplating having a baby or having any kind of big health event, this is not the policy for you," said study co-author Karen Pollitz, project director of Georgetown's Health Policy Institute. "It leaves people thinking they have protection when they don't."
Defenders of high-deductible plans say they usually charge lower monthly premiums and in some cases provide affordable insurance for people who otherwise would have no coverage at all. Employers sometimes contribute money to workers' special tax-exempt health savings accounts. Still, it is important to choose a policy carefully, supporters say.
"When you evaluate a high-deductible health plan, yes, you need to look at the deductible, you need to look at the out-of-pocket limit, you need to look at what the premium is versus other coverage that may be available to you," said Thomas J. Wilder of America's Health Insurance Plans, the industry association. "There's this whole series of measures and questions that you really need to look at and not just say this approach is 'good' or 'not good.' "
High-deductible plans are not always more expensive, the new study showed. For a more complicated pregnancy -- one that required treatment for gestational diabetes and hospitalization for preterm labor -- the likely out-of-pocket cost was $8,770 for those on a traditional plan and $14,000 in the small-business high-deductible plan. But it was only $6,000 for those in the high-deductible plan for federal employees.
High-deductible plans are becoming more popular, in part because the Bush administration has promoted them as a way to slow spiraling health care costs. About 4.5 million Americans were enrolled in such plans (with health savings accounts) as of January, an increase of 41 percent from a year earlier, according to the industry association.
In contrast with traditional plans, which pay at least a portion of health costs from the outset, high-deductible plans require consumers to pay hundreds or thousands of dollars out of pocket for medications, physicians' services and hospital care before most insurance coverage kicks in.
The deductibles are steep -- at least $2,200 for family coverage, compared with a few hundred dollars in a typical traditional plan. But the dedicated savings accounts enable people to accumulate a tax-free pool of their own money to pay the deductibles and other uncovered health bills, rolling over any unused funds to the following year.
The theory is that the plans, by making consumers more aware of the costs of care, give people an incentive to shop for the best prices and to forgo procedures they do not need. A Rand Corp. survey last year found that both employers and plan participants reported spending less on health care under the plans, but in some cases people were skipping necessary care.
In the new study, researchers compared the likely out-of-pocket costs of three hypothetical pregnancies of varying medical complexity under a traditional plan offered to federal employees to likely costs under a dozen high-deductible plans available today. Researchers said there is no way to know whether the high-deductible plans are representative of all such plans on the market.