The High Price of High Deductibles

Erika Anderssen* is 42 and lives in Indiana with her husband and two children. Erika works in customer service for a local roofing company, and her husband, Evan, is employed full-time on the line at a manufacturing plant a couple of towns over. “I’ve lived here my entire life,” she says. “Evan and I got married right out of high school. We never wanted to go anywhere else.”

“Money has always been tight,” she continues. “We’ve tried to do everything right. But especially with the pandemic and the factory closing for a while, we had to dip into the savings we had. We’re lucky our families live close by. We all kind of lean on each other when things get hard.”

Erika and Evan are doing okay, by Indiana standards. The mean household income in the state is around $70,000 and the Anderssens are right there. That’s where the good news ends, however, because according to the Living Wage Institute, the living wage for a family of four in Indiana is about $103,000. That’s a greater than $30,000 shortfall for the Anderssens, and they’re feeling it.

“Two years ago I was diagnosed with breast cancer,” says Erika. “We were somehow managing to get by until then, but the medical bills killed us. Even before the cancer could,” she adds with a wry smile. Fortunately, her sense of humor has been left intact.

“I have to laugh about it. If I don’t, I’ll cry. And I don’t want my kids to know how hard things really are.” Erika and Evan are doing their best to shield their children from the devastating effects of both the diagnosis and the financial fallout.

Fortunately for the Anderssens, Erika’s cancer was caught early and she was able to get treatment and is, for now, cancer-free. “It’s always there in the back of my mind. I try not to think about it, but I know there’s a chance it will come back.”

The massive amount of medical debt the diagnosis and treatment has left them with is more worrying than the return of the cancer, Erika says.

“We used to be okay. We could pay our bills every month. We didn’t have hardly anything left over, but we managed to make it work,” she said. They saw what credit card debt and overspending did to other family members and friends, and early on they made a commitment to live within their means. “It’s hard to never get ahead, but we figured that when the kids were older it would get easier and we could save more. But now, I don’t think we’ll ever make it.”

Erika and Evan owe medical providers around $14,000, and the stress that causes them is unimaginable. “It literally makes me sick to think about it. We want to pay it but some weeks it comes down to being able to eat or pay rent or pay the medical bill. We have insurance, but our deductible is $5,000 each year, and with the medicines and everything else, it’s just added up over the past couple of years. I dread having to go back to the doctor for checkups because I know that’s just more money, so sometimes I skip them. Sometimes I don’t get a prescription refilled because that’s taking food out of my kid’s mouths, and I can’t do that to them.” She worries that skipping doctor’s appointments and medications means that if the cancer comes back, they won’t catch it in time. “I got lucky the first time. I don’t know if I’ll be that lucky again.”

Consumer-driven healthcare and high-deductible health plans like Erika’s had their genesis in the late 1990s when people were encouraged to invest pre-tax dollars in health savings accounts to pay for medical costs that weren’t covered by their health insurance. It was thought that people would be motivated to look at healthcare as a consumable resource and therefore shop around for the best value in services. High-deductible health plans were looked upon as a way for both employers to save money and employees to have lower premiums, thereby lowering their monthly out-of-pocket costs.

What has happened, though, is that by pushing more of the burden for the cost of care onto the patient via higher deductibles, copayments, and coinsurance, healthcare consumption — and most importantly, crucial preventive healthcare — has decreased overall. The reduction in consumption is particularly evident in lower-income populations. According to the RAND Health Insurance Experiment, this reduction in beneficial preventive care has increased the rate of death from preventable illnesses.

Erika is one of the almost 30% of the insured population that has delayed or skipped recommended treatments, tests, or procedures because of cost. Additionally, according to the Commonwealth Fund, 43% of working-age adults with employer-sponsored health coverage said it was somewhat or very difficult to afford their health care. Having medical debt also impacted getting care; about 34% of those with medical debt in employer plans avoid getting care or filling prescriptions. Having insurance does not prevent debt; but having debt does prevent care.

Here at Salud we take the issue of healthcare debt very seriously, and one of the things that sets us apart from our competitors is that we have processes baked in to our procedures that check for solutions every step of the way. Our employees are empowered to do what is right for the patient, and this patient-first mindset is reflected in our high success rate for our providers. Healthcare debt and health equity are truly wicked problems, and we are committed to solving these problems by continually investing in the very best people, technology, and research.

Erika and Evan are trying to stay positive. “I’m okay for now, and that’s what matters, that I’m here for my husband and kids,” she says. “You just have to keep going and keep trying to do the right thing.” Erika has taken an additional part-time job to help pay down the debt, and Evan works as much overtime as possible. “We rely on our family to help take care of the kids. We’re lucky to have that - lots of people around here don’t have as much as we have.”

*Names have been changed