New Year Deductibles - What to Know
Healthcare insurance deductibles have significant effects on providers as the new year begins. Providers should be well-informed to effectively manage patient care and billing processes. Here’s what providers should know about healthcare insurance deductibles and the significant effects they have on providers as the new year begins:
Reduced patient visits and demand for services
High deductible health plans reduce overall employee health care spending by 12-14% annually, primarily due to patients reducing their demand for services. This decrease in utilization affects providers’ patient volume and revenue, especially early in the year when deductibles reset. For example, if a patient has a $5,000 deductible, they will need to pay the first $5,000 of covered medical expenses before their insurance starts paying.
Delayed care and preventive services
Deductibles also influence how patients use healthcare services. Patients tend to delay or forgo care, including preventive services, when facing high deductibles. This can lead to more severe health issues down the road, potentially impacting a provider’s ability to deliver timely and effective care.
Financial risks for providers
As patients become responsible for larger portions of their healthcare costs, providers face increased financial risks. They may struggle to collect payments from patients who cannot afford their deductibles, affecting the providers’ revenue stream. Given the potential financial burden of high deductibles, providers may need to offer payment plans to help patients manage their healthcare costs and receive the care they need.
Shift in service utilization patterns
Demand for services tends to slacken across the board during the deductible phase, including both preventive care and expensive tests. This shift can impact providers’ workflow and resource allocation.
Increased need for cost discussions
According to the Physicians Advocacy Group (PAI), 79% of physicians believe high deductibles are a key driver of patients’ cost concerns. Providers must be prepared to have more frequent discussions about costs and treatment options with patients.
Communication with Patients
Clear communication about deductibles is essential. Providers should be prepared to explain:
- The current status of a patient’s deductible
- How the deductible affects the cost of proposed treatments or procedures
- The difference between the deductible and other out-of-pocket costs like copayments and coinsurance
Administrative burden
High-deductible health plans can increase the administrative burden on providers, as they may need to spend more time explaining costs, billing, and collecting payments directly from patients.
Conclusion
By having a clear understanding of the effects of high-deductible health plans, providers can better position themselves for the associated challenges as the new year begins and deductibles reset. Providers should be ready to adapt their practices to mitigate negative impacts on patient care and financial stability.
