High Deductible Health Plans and HSAs: Are They Hurting Your Employees?

Many companies in the transportation and manufacturing verticals were promised big healthcare savings and greater consumer choice when HSA/high-deductible health plans (HDHP) were introduced about 20 years ago.

Now, 20 years later, where are we? Healthcare costs are skyrocketing, employees are having to choose between paying the rent and going to the doctor.

Did HDHP's deliver?

The Origin of HDHPs and HSAs

About 20 years ago, HDHPs were introduced to tackle rising healthcare costs and provide employees with more options. The idea was simple: HDHPs have a high deductible that must be met before the insurance company starts paying for expenses. This includes everything from doctor's visits to prescriptions. To help with these high deductibles, HSAs were introduced. These accounts allow employees to save money on a pre-tax basis, and employers can also contribute to them. The goal was to offset the large deductible.

The Mixed Results

But did it work? After 20 years, the results are mixed. Healthcare costs are still rising, and employees are generally less healthy. Instead of providing more options, HDHPs have often discouraged employees from seeking medical care. Many employees face tough decisions: should they pay their bills, buy groceries, or go to the doctor?

This reluctance to seek medical care has serious consequences. Treatable conditions like diabetes and heart disease can worsen if not addressed early. As a result, employees get sicker, their conditions become more severe and the employer pays higher healthcare costs. It's a death spiral.

Alternatives to HDHPs and HSAs

In my opinion, HSA-type plans have been a mixed bag. So, what are some alternatives?

Zero Deductible, Zero Copay, Zero Coinsurance Plans

One promising option is a plan with zero deductible, zero copay, and zero coinsurance. This model flips the traditional approach on its head. By removing financial barriers, employees are encouraged to seek care early. This helps catch diseases and conditions in their early stages, making them easier and cheaper to treat.

Self-Funded Plans

Another option is self-funding your health plan. This gives you control over the plan design and can be tailored to meet the specific needs of your company and employees. By taking control back from the insurance companies, you can create a plan that is both cost-effective and beneficial for your employees.

Direct Primary Care Models

Direct primary care models are also worth considering. These work similarly to zero deductible plans by providing incentives for employees to engage with primary care providers early. This proactive approach can prevent large costs down the road by catching and treating conditions before they become serious.

Lastly

These are just a few ideas to combat rising healthcare costs without placing undue financial burden on your employees. For more ideas or a discussion on how to improve your employee health plans, feel free to give me a call.