Galen Benshoof, a guest blogger at The Incidental Economist, writes that rising deductibles are not entirely a consequence of ObamaCare, but also the rise of Health Savings Accounts and associated high-deductible, consumer-driven health plans over the last decade.
However, Benshoof’s description of the effect of consumer-driven health plans suffers from misunderstanding:
In the 1990s, some conservatives gravitated to a health insurance scheme that shifted costs and responsibility onto workers. They called this consumer-directed health care (CDHC), although the real beneficiaries were employers.
First, it is not possible for employers to shift “costs and responsibility” for health benefits onto workers because workers always bear 100 percent of the cost and responsibility for their health benefits. In our employer-based system, money is siphoned away from their wages before it even hits their paychecks. This is one reason why wages have stagnated for years: More compensation has come as benefits. A consumer-driven health plan puts more health-care dollars under patients’ control than under control of insurers and employers.
Second, it is hard to fathom how this shift of control benefits employers. It has benefitted society overall, because it has bent the curve of health-care inflation. John Goodman and Peter Ferrara recently explained this, using data that overlaps Benshoof’s.
Third, there is a fundamental difference between the consumer-driven plans that arose over the last decade and the high-deductible, limited-access plans in the ObamaCare exchanges. The former cam to dominate the individual market, and made significant inroads to employer-sponsored benefits, because purchasers found value in them. The latter are the results of a “race to the bottom” in which insurers are engaging in a failing attempt to attract young and healthy people while shunning older and sicker ones.