U.S. employees to face health care sticker shock

The Chicago Tribune
By: Staff
October 28, 2012

Visit to New York City orthopedist: $223. One X-ray: $50. One follow-up magnetic resonance imaging test: $766. Total bill for checking out that aching shoulder: $1,039 -- all to be paid by the patient, rather than the insurer.

Healthcare has gone retail.

Over the next 18 months, between one quarter and one half of Americans who get insurance coverage through their employers will pay more of their doctor bills themselves as companies roll out health care plans with higher deductibles, benefits consultants say. The result: sticker shock.

"They have huge out-of-pocket costs before they get any insurance coverage, it's a real slap in the face," said Ron Pollack, the executive director of Families USA, a healthcare advocacy group.

High-deductible plans set a threshold for medical expenses that an individual must pay for, often in the thousands of dollars, before insurance kicks in. Studies show people on these plans are three times more likely to delay or skip care than people on traditional plans, where doctor or emergency room visits are covered by a relatively low co-payment.

These plans have been around for years, pushed by employers, insurers and industry experts who believe that consumers with "skin in the game" will drive demand for better quality care at a lower cost. It is a rationale also backed by President Barack Obama's Republican challenger Mitt Romney.

But now corporate America's adoption of high-deductible plans is accelerating, partly because of Obama's health care reform, which requires insurance plans to provide more expansive coverage such as preventive care.

Several industry surveys forecast a two-percentage-point increase in the number of companies offering only high-deductible plans in 2013 to about 19 percent, and a larger jump of anywhere from 5 to 25 percentage points in 2014.

"2013 is almost a calm period before a period of intense change in 2014," according to Randall Abbott of Towers Watson & Co., a Boston-based senior consulting leader at the human resources firm.

The shift means consumers will have to spend many more hours researching their treatment options and managing costs on websites like Healthcarebluebook.com, which helped budget the cost of examining the shoulder pain mentioned above.

It could also spur lawsuits against doctors whom patients may blame for not making clear whether a test or procedure would spare them future harm, legal experts say.

SKIN IN THE GAME

About 170 million people were covered by employer-based insurance in 2011, according to the U.S. Census Bureau.

Companies with workers enrolled in high-deductible plans in 2012 include General Electric Co, Wells Fargo & Co., Whole Foods Market Inc, Chrysler Group and American Express Co.

In 2013, Bank of America Corp. will offer some employees high-deductible health plans. Smokers who work at the bank will also have to pay higher healthcare premiums than non-smokers.

Haavi Morreim, a lawyer and professor in the College of Medicine at the University of Tennessee, notes that individuals have the legal rights of any customer covered by U.S. contract law, which assumes that there will be a "reasonable charge" for the service.

Two cases based on this notion -- one in Indiana filed by a patient against a hospital and another filed in Missouri by a hospital seeking payment from a patient -- have reached appeals courts in the past year.

Laws dealing with "informed consent" may also play a role in putting the onus on doctors to clearly disclose costs when explaining treatment options. Doctors may be liable for a breach of fiduciary duty if their healthcare recommendations turn out to be too aligned with their financial interest, Morreim said.

"Courts are beginning to pay increased attention to this because more people are in high-deductible plans and more people are beginning to ask, 'What does this cost?'" said Morreim, who has written several articles on the issue for law journals.