High Deductible, High Risk

'Consumer-Directed' Plans a Health Gamble'

By Christopher J. Gearon
Special to The Washington Post
Tuesday, October 18, 2005

Elizabeth Fowler can be called an educated health care consumer: An expert on health care policy, she used to be the chief health and entitlements counsel for the Senate Finance Committee. But she was pushed to the limits of her knowledge and patience keeping track of her so-called consumer-directed health plan -- a type of insurance designed to protect consumers from catastrophic medical costs while prompting them to shop wisely for routine care.

The policy Fowler bought from Definity Health through the Federal Employees Health Benefits Program in 2003 featured a low premium (her share was $1,000 a year) and a relatively high annual deductible of $600. Fowler had no major problems that year, but she had few health care needs outside of some dental work.

Last year, however, her out-of-pocket expenses doubled. Along with her premium, she paid nearly $1,500 for allergy shots and physical therapy for a bum knee. Fowler had been aware that she might pay more under a high-deductible policy if her health or luck turned bad, but she never realized just how much. "You need to read the fine print," she says.

"I appreciate the concept of making consumers more aware about health care costs," says Fowler, a District resident who now works in the private sector. But "I didn't understand the full consequences" of choosing a high-deductible policy. Fowler's health plan left her confused and with a pile of paperwork -- including late-payment notices from doctors -- and big costs, some of which she considered improper. She says her experience was "awful," adding, "I don't consider it consumer-directed and it's certainly not consumer-friendly."

The concept of consumer-directed coverage "involves empowerment, it involves patients taking greater responsibility and being more informed and participating in their health care decision-making," says Devon Herrick, a senior fellow with the National Center for Policy Analysis, a Dallas-based think tank.

These plans also expose patients to more costs. Faced with paying in full for their treatment until their deductible is met, consumers have an incentive to be careful about their health care spending. Click here for the rest of the story. And here is the rest of it.