White House Endorses High Deductible Health Insurance

But only if you are under 30 years of age:

These “catastrophic” illness plans would make insurance less of a financial burden, but they would require high deductibles — at least $5,950 in out-of-pocket spending before most benefits kicked in…

Under the Senate bill and the Obama proposal, the plans would be offered on new state insurance exchanges that would be set up in 2014 for people who buy their own insurance and for some small businesses. They would be sold only to people under 30 and to others exempted from buying insurance because of financial hardship.

Comments (11)

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  1. Bruce says:

    This can only be described as bizarre.

  2. Virginia says:

    I agree with Bruce. The reasoning isn’t really there.

    In my opinion we should all be maxing out our HSA’s. My generation (the under 30 group) will not only see increasing costs, but we’ll be paying more of the bill. This is fine, since it’s free market, etc. But, it’s the only prudent way to prepare for health care. Plus, it saves me the hassle of arguing with the government/insurance company about treatments they might not cover. If I want XYZ procedure, it’s mine.

    I don’t see why anyone, regardless of age, would not want health care on their own terms.

  3. Tom H. says:

    Why isn’t this age discrimination? Only young people can have a CDHC plan? Where’s the logic in that.

  4. Bart Ingles says:

    From the article:

    One reason the Senate bill includes the catastrophic plans is that other parts of the legislation would increase insurance costs for young adults. Healthy young adults currently pay far less than older consumers, but both the House and Senate bills limit how much more insurers could charge older people. The new “age-rating” restrictions would likely boost costs for young adults.

    In other words, they’re only making this policy exception as a way to better conceal the implicit tax on young people.

  5. Devon Herrick says:

    Although well into my 40s, I can still purchase a $5,000 deductible (hospitalization only) plan from BlueCross of Texas for $74 per month. In the proposed exchange, I would not have that option. However, I would have the option of paying a penalty of $695 to $750 if I choose to go without coverage.

    Many people would likely opt for the penalty knowing they can always sign up for coverage if they need costly medical care. Of course, this type of perverse incentive is no way to run a risk pool. But then again, Obama/Pelosi/Reid apparently do not believe the economic principles of risk apply to their preferred health reform solution.

  6. Virginia says:

    Taxing young people must be the new black this season.

  7. Ian Random says:

    Last benefit election cycle, I noticed that the cost savings was roughly twice the deductible and that was a fraction of the minimum quoted above.

  8. Texas says:

    I don’t understand the reasoning here. We are 30, and have 3 kids. Without our high ded. plan we would not have been able to afford very expensive treatments for our son. There are no copays that never end and we only pay $50 a month for the premium. HDHPs are perfect for people who get very sick too, so why not extend the age limit!

  9. stevek says:

    They don’t want to extend the age so that the health insurance companies get more revenue. They can’t charge as much if high deductible plans are available to all ages.

    Make no sense. But when govt is controlled by corporations not much makes sense.

  10. Michigan says:

    High deductible health plans (HDHP) are not only available to young people. Most employers are offering only this type of plan or offer it as a choice within their medical plan options. Most employers seed the Health Savings Account (HSA) that works with the HDHP ($500/single; $1,000 family)and offer it with no premium or low premium in an effort to entice you to enroll for this type of coverage. The insurance companies benefit and your employer benefits because they shift the cost burden to you. You can also choose this type of plan in an individual market through Blue Cross or Aetna, etc. I think these plans are terrible. They benefit the healthy and the wealthy. What people fail to realize is that you are taking a gamble every year that you will be healthy and have no catastrophic illness that will result in high health care costs. Eating healthy and taking care of yourself doesn’t guarantee that you won’t get a chronic condition. Ask my friends who got breast cancer in their 40s or Chohn’s in their 30s, and exercised, maintained a proper weight, didn’t smoke etc. In addition to the high deductible, there is an out-of-pocket limit of $10,00O or more if you have family coverage ($5,000 or so if you’re single) for example. In addition to saving money for the rainy day (or when you lose your job and need 6 – 9 months in reserve–a pretty frequent occurance today) you better have enough banked to pay your full out-of-pocket maximum each year. I’ve been around too long and seen to many “resolutions” to the health care problem offered in the past 30 years (i.e. flexible benefits, HMOs, managed care, etc) to find much to crow about or feel comfortable with an HDHP. In 10 years (or sooner) some “guru” will come up with another “market driven” solution that will prove to be a waste of time and do nothing stem the tide or rising health care costs. To have any success in reigning in health care costs you need to go after all people in the health care system (providers, administrators, insurance companies) and take away the profit motive, not just target the end user. Point me in the direction of single payer and I’ll breathe a lot easier (and sleep a lot better).

  11. Widya says:

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