“In economics, a moral hazard is a situation where an economic actor has an incentive to increase its exposure to risk because it does not bear the full costs of that risk. Anytime a party in an agreement does not have to suffer the potential consequences of a risk, the likelihood of a moral hazard increases.”
The unintended effect of deductibles is often higher utilization, not less. Deductibles in health care are silly and make no economic sense to either members, plan sponsors or health care providers. A $1,000 deductible is worth little in aggregated paid claims, often less than 1%.
However a deductible can be cost effective if plan members have access to exactly the same medical services through directed care. “Go here and it’s free, go anywhere else it’s not so free” is a strategy that makes the intended power of a deductible robust and useful.
The message plan sponsors should make clear to plan members is “Where you go for care is your business, how it’s paid is ours.” – Bill Rusteberg
Met your deductible? You could be losing out on savings
SOURCE: Deductibles and Your Health
Why now?
As the end of the year approaches, it may be a good time to schedule health procedures you’ve been putting off. Meeting your medical insurance deductible could save you thousands of dollars. Here are some more reasons to consider seeking treatment now.
- You may want to consider seeking treatment that improves your health and allows you to maximize your insurance coverage. After you have met your deductible, your insurance benefits may cover additional medical treatment at a reduced rate or at no cost at all.
- Many people will be taking advantage of having met their deductibles in the last months of the year. This could make it difficult to schedule operations and other procedures at the end of the year. Appointments will fill up fast, making it harder to schedule your procedure.
- Postponing important medical treatment and preventative care may result in worsening conditions and costly treatments. Your health can’t wait.
- If you’ve met your deductible, elective procedures like joint replacement, weight loss surgery, hernia repair and more could be covered at little or no cost to you.
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