Is high-deductible insurance changing healthcare shopping habits?

New Jersey resident Ray Rizzuto says he keeps a closer watch on healthcare spending ever since he switched his family to high-deductible health coverage.

A deductible is what the consumer pays out of pocket before the insurance company picks up the tab. It’s not uncommon for the deductible for a single person to be $2,000 or $3,000.

Do you have two or three thousand dollars socked away for health care? For many people, that’s how health insurance works these days. You’re covered, but until the medicals bills really add up, you write the checks. When your kid sprains an ankle, or your allergies get bad enough, the doctor’s fee comes out of your pocket.

Rizzuto is a software developer and gets coverage through work. He and his wife have two kids, and their family deductible is $6,000.

“It’s really hard to kind of manage that risk, which is what we are really doing, we are self-insuring the risk of up to 6,000 a year,” Rizzuto said.

Rizzuto got his first screening colonoscopy on schedule at age 50, no problem. (Preventive care typically requires no out-of-pocket spending.) But when the doctor suggested another routine screening test at age 55, Rizzuto got a second-opinion, of sorts, from his health plan.

The insurance carrier pays 100 percent for preventive colon screening, but only every 10 years, so, Rizzuto decided: “I think I’ll wait.”

In 2014, about 40 percent of insured workers in the United States had an annual deductible of $1,000 or more. That’s up from about 10 percent of workers in 2006, according to a survey from the Kaiser Family Foundation.

“Too many consumers only look at the cost of the premiums and have not looked at costs that will hit them in the pocket,” said Ron Pollack, executive director of Families USA, a national organization for health care consumers.

Pollack says people who buy insurance with the help of a navigator or counselor likley are more aware of all the costs associated with their insurance. 

A new Families USA survey found that about one in four people who bought non-group health insurance in 2014 reported that they skipped tests or treatment because they could not afford it.

It’s not clear if that’s actually an improvement–or not–for the universe of people with insurance, but Pollack points out that overall many more Americans now have coverage since the implementation of the Affordable Care Act.

A tradeoff 

Each year, when his company offers new insurance options, Rizzuto runs the numbers.

“And every time I do it, the high deductible plans still wins out,” he said.

It’s a tradeoff. The Rizzutos have a high deductible plan, but in exchange, their monthly premium price is lower: They pay about $214 for family coverage each month.

In the workplace, high-deductible plans are usually matched with a health savings account. Workers add money tax-free, so they’ll have cash on hand when expenses come up, and at many companies, employers also contribute to their employees health savings fund.

Rizzuto is learning to play the high-deductible game. Last year, after the family spent the required $6,000, he finally decided to do something about the carpal tunnel problem in his wrist. He had surgery on Christmas Eve, just days before his deductible was scheduled to reset for the year.

“I was going to have to have it eventually, I might as well do it in a year where the perfect storm occurred, where I could get it paid at 90 percent, rather than out of pocket,” he said.

Uninsured people often check-out prices before they get care, now lots of people who have insurance are asking too.

Insurance broker Scott Hafetz, president of Hafetz & Associates in Linwood, New Jersey, consults with companies on their benefit plans and helps individuals buy coverage on their own.

These days, part of his job is talking through strategies with clients to limit their out-of-pocket spending. His clients try to be prudent shoppers, Hafetz says, but they often can’t figure out how much they’ll be charged for a doctor’s visit.

“It’s frustrating for them,” he said. “You know, until the transparency is improved it’s really hard to do it.”

And prices vary—a lot.

“In the world of prescriptions, you could go to three different CVSs, all three charge a different amount,” Hafetz said.

His clients who feel they are “pretty healthy”—and don’t plan on using their insurance—are the ones who are mostly likely to select high-deductible coverage.

“If they’ve got a lot of on-going issues,” Hafetz said, “they tend not to pick a deductible plan.”

A rising ‘underinsured’ rate 

This week, the Commonwealth Fund noted that the “underinsured rate” among people with employer health insurance doubled from 10 percent in 2003 to 20 percent in 2014. The term “underinsured” includes people who have coverage but very high out-of-pocket costs and deductibles relative to their income.

The report is called “The The Problem of Underinsurance and How Rising Deductibles Will Make It Worse.”

In the book “Catastrophic Care: Why Everything We Think We Know About Health Care Is Wrong” author David Goldhill paints a somewhat gloomy picture of healthcare in America.

Goldhill is president of GSN, best known as the Game Show Network. His father died in 2007 after getting a hospital infection. Goldhill says soon after, he got determined as a “grieving son and businessman” to figure how healthcare works and what the incentives drive the sector.

He still considers American health care “high priced,” “poorly performing” with “terrible” customer service. But, he’s optimistic about the potential of high-deductible plans to help nudge the entire system toward better care at lower costs.

Most of his GSN workers choose high-deductible plans.

“Candidly, all I hear about is: ‘Oh, this has been great, and here’s why I like it,’ but then again, when you have a CEO who spends a lot of his time advocating for this stuff, I worry I may not get whatever criticism there is,” he said.

Goldhill acknowledges that high-deductible coverage may be less attractive for people who don’t have an employer helping them stockpile money in a savings account.

“Certainly one alarming piece of data I saw recently suggested that even with the increase of coverage we’ve seen, the percentage of Americans who say they put off health care last year, meaning out of pocket costs, stayed about the same,” he said.

Another Kaiser Family Foundation analysis found that the average deductible across the United States doubled in eight years—from about $600 a year to near $1,200.

Opportunity or obstacle? 

Consumer advocates say high-deductibles have become an obstacle to health care for some, especially people who buy coverage on their own through the Affordable Care Act marketplaces and people who don’t have a health savings account

Goldhill’s not sure yet: “We don’t really have enough data, all we have is anecdotes, to know how that’s affected treatment.”

But in Western Pennsylvania, Jan Klein, a member of the Pittsburgh Business Group on Health believes the anecdotes from companies have already switched their workers to high-deductible coverage.

“Their costs went down right away,” Klein said. “Well, why did their costs go down? People weren’t getting care. And a few years later, people were going in with sicker issues because they weren’t getting care when they really needed it. We didn’t want that for our people.”

Klein is chair of the Allegheny County Schools Health Insurance Consortium. Her group is bucking the trend and decided to offer health plans with no deductible at all.

The consortium narrowed the network of providers that are available to plan members, and Klein says her group is trying to steer workers to lower cost, high quality hospitals and doctors.

To avoid higher fees, some employees will have to select new doctors and go to hospitals they haven’t used before, but Klein says workers are ‘adjusting.’

“They said: Maybe I can find a new provider,” she said. “The pocketbook is a very strong motivator.”

GSN CEO David Goldhill says the health industry will continue to stumble as long as real, human customers are kept so distant from the cost of their care.

“The customer of the health care system is the insurer and Medicare,” he said.

Having a middleman—or third-party in the middle of health-care transaction changes that interaction, Goldhill says. If you’ve ever had a fender bender and taken your car to the mechanic for a fix, he says, often they’ll ask you: ‘Is this an insurance job?’ If it’s an insurance job, “they paint a lot more of the car than they need to,” he said.

A push for transparency 

The proliferation of high-deductible coverage is a small part of a bigger move toward “consumer driven health care.”

“They’re going to walk in to doctors offices and clinics and say: What’s the price? And if you can’t tell them, they’ll go somewhere else,” he said.

At the same time, Goldhill says the system is fessing up–becoming clearer–about what things actually cost because consumers have become more careful spenders–and more demanding about what they are getting in return.

That’s what excites Goldhill the most—he says ‘consumer driven care’ can do more than drive down spending it could help improve the care we receive.

“To some extent we’ve given up a lot of our normal consumer skepticism, because having someone else pay for everything implied that someone else was taking care of everything,” he said.

“There was an expectation that the doctors were good, or clinics were good, or the diagnoses were sensible, or the test that you were being sent for were needed, or the treatments were reasonable.”

Goldhill says consumers will ultimately do a better job policing quality in the system.

Log on to whyy.org/pricecheck to share how much you paid for common medical procedures like colonoscopies, mammograms or MRIs.

This story is part of WHYY’s reporting partnership with NPR and Kaiser Health News.