Over the years, we have come to accept whatever the health insurance companies send our way. One of these is the deductible. It has become a part of our thinking as a part of any plan. Many employers have been able to keep it out of their employees plans but that too is changing. We have no recourse and the state insurance departments seem to roll over and agree to everything.
I was wondering how this concept got started and how it caught on? Was there a think tank of insurance industry folks who got together and said, Let’s create a concept where patient- consumers have to pay in to the plan beside paying the premium? We can sell it as there being a need to contain costs?
Deductibles defined mean, what you pay before the insurance company pays. Its systems integration dates back to the 1960s. At that time, you paid the deductible, usually $25-50 before the insurance paid anything. That concept has changed over the years. Deductibles range anywhere from $100- 5,000. With many plans, the higher the deductible, the lower the premium. Healthy people often opt for this plan hoping a critical medical event will not occur.
What gets me thinking and rather annoyed is, there is no logic or reason as to how a deductible is applied. One would theorize a deductible needs to be paid out in a logical manner in conjunction with insurance company payments. That is not the case. The applying of the deductible appears to be random. I know the insurance companies have a system but it is not one revealed when asked. I deal daily with the bills and explanation of benefits (EOBs) and have yet to find a system. It doesn’t get spread across the billing in an allotted manner nor is there a prescription for application. I have asked and so far no one has been able to define it.
I do know that with the onset of co pays and coinsurance, the deductible has become even more random in its application. For instance, I have a client who went to the ER via ambulance and was inpatient for six days. The deductible was applied only to the ambulance ride. Although, there were many other possible areas it could be applied to use it up, it wasn’t. What I have learned, is in the full insurance policy are clues as to what might be a potential deductible item. And there is no arguing for the application of the deductible. It lives in the dead zone of negotiable possibilities.
And so after finally getting to the full use application of the deductible, in many policies, it is not considered part of the out -of-pocket maximum! How crazy is that? Where is the outrage? I would think a $5,000 deductible is quite a bit of money out-of-pocket!
We the consumers are like sheep to slaughter with health insurance. We get angry and upset but shrug our shoulders because what can we do? If the new healthcare reform gets past the next few years of politics, maybe some of that will change. The idea of health exchanges is it will be more market driven to keep cost down. However, in Massachusetts, if you do not have employer insurance and need to purchase it, and are above the poverty level, you will be faced with high premiums with high deductibles, copays and coinsurance. Cost is not down.
I couldn’t find the actual origins of the deductible except for when it started to appear. It seems the deep origins go back to the early guilds. For now, it has taken hold and is not going away.