January 6, 2016 by Harry Stoll
Medical providers are seeing more patients with higher deductibles than ever before. A High Deductible Health Plan (HDHP), according to newly released IRS guidelines, is a major medical insurance policy with minimum deductibles in 2016 of $1,300 for singles and $2,600 for families. The maximum deductibles allowed by law have increased to $6,550 for a single and $13,100 for a family. With this amount out of pocket, many consumers will be hard-pressed to come up with the funds in order to pay providers.
According to a recent Kaiser Family Foundation report, the average annual out-of-pocket costs per worker rose almost 230% between 2006 and 2015 as more employers purchased (because of skyrocketing premiums) HDHP’s for their workforces. In 2015, 24% of all workers were enrolled in a HDHP with a savings option (HSA). This is a big rise since 2009, when just 8% were covered by such plans. According to Rand Corp., it is expected that 1 in 3 employers will be offering HDHP’s by 2018. Additionally, higher out of pocket costs also appear to be the reality for consumers who purchased health insurance through federal and state-run marketplaces. According to an April 2014 report from the U.S. Health & Human Services Dept., 65% of enrollees chose silver plans, in which 30% of total health care costs would be covered by the consumer. The average deductible in these plans was almost $3,000 annually for a single.
Providers understand the healthcare financial landscape for many patients has changed dramatically. A business office manager’s primary concern used to be whether or not a patient had insurance. Now, they must be concerned about so much more. Physicians must be able to balance providing good clinical care with limiting the financial burden it might create. The providers must now be aware of their patients’ financial limitations. Educating patients on their plan limitations early on not only helps them understand their financial responsibilities, it mitigates billing issues and improves patients’ satisfaction—no one likes a surprise especially one that costs them money!
Many providers have already started to put in place new processes that offset some of the negative effects HDHP’s have on their own bottom line. Point-of-Service collections that require payment at the time of the appointment are becoming an increasingly popular necessity. Some providers are offering medical bill financing services, either directly or through partnerships with third-parties. These services allow consumers to make smaller payments over time to control the burden of upfront costs.
The increasing prevalence of HDHP’s has some hospital providers revisiting their charity care plans to examine how bad debts are treated. Some Charity Care Plans at hospitals have started incorporating patients that actually have health insurance, but are currently unable to afford the full deductible and their coinsurance. Remember, in 2016 some patient families will have an out-of-pocket expense over $13,000!
Communicating openly with patients from the beginning of their respective treatment plans can lead to mutual agreement about payment plans and increase the likelihood of whole or partial collections. The billing discussions can lead to better budgeting on a per-patient basis and a more accurate forecast of charity care and bad debts.
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