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More U.S. Companies Switch To High Deductible Health Plans


It's MORNING EDITION, from NPR News. I'm Renee Montagne.


And I'm David Greene. Good morning.

The cost of health care in this country seems to be coming under control. Health care spending, while still on the rise, has increased at historically low levels the last few years, which makes you wonder: Why aren't we feeling it?

Some of you've probably noticed it's costing more to go to the doctor these days and also, more to fill out a prescription. Out-of-pocket costs - co-pays and deductibles - have been going up rapidly.

NPR's John Ydstie looks at why that is, and what could change it.

JOHN YDSTIE, BYLINE: Jenny Miers and her husband felt the sting of higher out-of-pocket medical costs when they adopted a 3-month-old baby girl last June. Shortly after they got her home, she developed a fever, which they suspected was caused by a urinary tract infection. So they took her to the emergency room.

JENNY MIERS: And they did a quick check on her, confirmed that that's what it was; so we thought we were in the clear and that we were going to go home with, you know, the little, pink antibiotic, and we were good to go. But we were told pretty quickly, no, you're being admitted.

YDSTIE: Hospital protocol required that the baby stay in the hospital for at least 48 hours, to make sure the fever wasn't caused by something else. In the end, the baby was fine, but Miers and her husband felt some pain in their pocketbook.

MIERS: We currently owe 7- or $8,000.

YDSTIE: That's almost $3,000 more than she would have paid under her old policy with its lower out-of-pocket cap. Miers' company recently doubled the deductibles and out-of-pocket maximum on her policy. The out-of-pocket max is now $10,000. That's made her more aware of the costs.

MIERS: We're paying a lot more, and we're going to question everything that you're putting in front of us to make sure that, you know, it was necessary.

YDSTIE: Getting people to act like price-sensitive consumers is the point, says Thom Mangan, CEO of UBA - United Benefits Advisors - based in Chicago. He says there's been a big shift by employers to higher deductible, higher co-pay plans, and away from HMO-type plans with very low out-of-pocket costs.

THOM MANGAN: If structured properly and communicated properly, they are effective in holding down costs. And their trend is significantly below that of low-deductible, low co-pay plans because people actually think about what a prescription costs.

YDSTIE: But Jenny Miers said her experience with her sick child demonstrates it's very hard to get good information on prices in the health care system.

MIERS: Everything is quite confusing out there, even with getting the itemized bill and trying to understand what we're looking at.

YDSTIE: Mangan, whose firm UBA advises companies on health care options, says this is a problem with high-deductible programs.

MANGAN: We've raised the cost, but we didn't provide the information that was promised. It's coming. We are working with a company called Castlight. And with a smartphone, you can type in information on this is my condition, this is the provider I want to see; and it will actually tell you what the quality outcomes are and the pricing.

YDSTIE: Leah Binder is CEO of The Leapfrog Group, a nonprofit that represents businesses that purchase health benefits for their employees. She says companies are rapidly moving to high-deductible plans.

LEAH BINDER: This is a tsunami of change. Five years ago, about zero people had a high-deductible health plan and now, it's 1 in 5 American workers.

YDSTIE: Binder says consumers may have a hard time getting transparent pricing information during the transition, partly because health care pricing is arcane and even bizarre.

BINDER: It's quite difficult. We don't have the right kind of transparency. But I don't see a solution to that, unless we have somebody driving a market. When consumers are demanding things, they tend to get them.

YDSTIE: Binder expects a rapid shift to more transparent pricing. She points to a new Massachusetts law that requires health care providers to give prices for treatments within 24 hours of a request. She also says the high out-of-pocket costs in many Obamacare policies will add to the pressure for pricing transparency.

In the short-term, Binder says, consumers may pay a bit more for their health care. But in the long run, she believes consumers will pay less than they would have, as health care responds more to market forces.

John Ydstie, NPR News, Washington. Transcript provided by NPR, Copyright NPR.

John Ydstie has covered the economy, Wall Street, and the Federal Reserve at NPR for nearly three decades. Over the years, NPR has also employed Ydstie's reporting skills to cover major stories like the aftermath of Sept. 11, Hurricane Katrina, the Jack Abramoff lobbying scandal, and the implementation of the Affordable Care Act. He was a lead reporter in NPR's coverage of the global financial crisis and the Great Recession, as well as the network's coverage of President Trump's economic policies. Ydstie has also been a guest host on the NPR news programs Morning Edition, All Things Considered, and Weekend Edition. Ydstie stepped back from full-time reporting in late 2018, but plans to continue to contribute to NPR through part-time assignments and work on special projects.