Daunted by high health deductibles, patients skimp on appointments and prescriptions

A cancer patient in Deer Park fell $2,200 in debt because of it. An Islip woman doesn’t fill her prescription to avoid it. And a Melville parent spends hours every month ensuring her payments are properly credited toward it.

Four-figure deductibles are an unavoidable part of life for many on Long Island. Health insurers won’t cover much beyond routine, preventive care until patients pay hundreds for exams, lab work and other medical care, and their spending surpasses the deductible —  the threshold at which the policy’s broader coverage kicks in.

A growing share of New Yorkers have high-deductible plans, with an annual deductible of $1,600 or more for an individual and $3,200 or more for a family.

About 47% of private-sector workers on individual plans sponsored by their employer in the metro area had a high-deductible plan throughout 2020-2022, the most recent regional data available from the U.S. Agency for Healthcare Research and Quality. The portion was 44% for those with family plans.

Thousands of Long Islanders shopping on a state-run insurance marketplace are also enrolled in high-deductible policies, according to state Department of Health data. New York's exchange tends to attract people who aren't insured through their job and don't qualify for government plans geared toward low-income families, according to the The New York Health Plan Association, which represents insurers.

Across all employer-sponsored plans, workers in the metro area contended with upfront responsibilities that, on average, were above the federal government's high-deductible thresholds,  2020-2022 data from the U.S. Agency for Healthcare Research and Quality shows. 

By having patients more directly cover their medical bills, health plans with big deductibles have successfully steered people away from unnecessary care and brand name drugs, insurance brokers said. But these policies also deter people from getting critical care, saddle them with administrative and accounting responsibilities and exacerbate inequalities, according to health policy researchers. 

Winter is a particularly pricey season for patients. Most plans reset to zero the tally toward deductible spending every January, which means many people now have to cover the entire cost of appointments, drugs and diagnostics. The upfront responsibility has Long Islanders wary of how much medical care will cost and stressed about what their bodies — and bank accounts — can afford.

“I don’t remember my parents ever getting a bill for thousands of dollars. You paid your $20 copay, and you left,” said Laurie Condon, 54, a Melville resident with a high-deductible plan. “I don’t feel like my insurance is helping me.”

How we got here 

Deductibles grew more common after federal legislation in 2003 authorized health savings accounts, where paycheck deductions could be stored and used for medical expenses tax-free.  People may open one if their plan’s deductible is high — a threshold the federal government adjusts annually — and complies with other guidelines. These policies typically have lower premiums or monthly subscription fees. They work well for younger, healthy people, who are less likely to have significant medical needs. They can stash what they save on premiums in a health savings account, roll the funds over from year-to-year, and access it when necessary, brokers said.

Initially, switching from a more traditional plan to a high-deductible model could save companies and workers significantly, brokers said. But as health care costs grew, many types of health care policies increased deductibles and the distinction grew blurry.

An individual on a private sector employer's plan in the metro area had an average annual upfront responsibility of about $1,730, according to 2020-2022 data from the U.S. Agency for Healthcare Research and Quality. During that period, the average annual deductible for individuals with high-deductible plans reached about $2,430, the data shows. For families on plans provided by private sector employers, the average annual deductible in the metro area was nearly $3,290 —  and about $4,680 for those on high-deductible plans — from 2020 to 2022, according to the agency.  Its analysis doesn't factor in employers' contributions to health savings accounts, which reduce patient outlays.

Employers have relied more on deductibles for several reasons, said Jim Winkler, chief strategy officer at Business Group on Health, an organization made up of hundreds of employers focused on improving company-sponsored benefits. Firms have moved away from health maintenance organization plans — those with local clinician networks and more co-payments or flat fees due at the time of care, he said. Businesses have turned toward alternatives because they are simpler to administer nationwide.

As costs increase,  hiking the deductible is often a simpler way to have employees contribute more than raising co-payments or coinsurance rates, or the portion of the final bill patients must pay, Winkler said. That strategy has been appealing in recent years, when hiring has been competitive and firms want workers to see minimal out-of-paycheck deductions for their premiums. 

Companies are shouldering a bigger share of the increased health care costs, said Dr. A. Mark Fendrick, director of the University of Michigan Center for Value-Based Insurance Design, which aims to improve health outcomes while containing costs. But workers are still paying more for less generous health care, he said. By ramping up deductibles, insurers have broadly discouraged many types of care, which poses challenges for poor Americans and those with chronic conditions, he said.

“It’s essentially a sick tax,” he said of plans that emphasize lower premiums. “My patient should not have to have a bake sale to afford her insulin, her cancer chemotherapy, her mental health therapy.”

Health care comes at a cost

A high-deductible plan has caused financial harm for Chris, who asked that her last name not be used because of the sensitive nature of her situation. The Deer Park resident is in her 60s, battling thyroid cancer and working as a health aide for her ailing mother. She earns about $18.20 an hour — enough to bump her off Medicaid this summer, but not enough to easily cover her food, taxes and other basic expenses, Chris said.

“For them to throw me off like that was a nightmare,” said Chris. “Their answer to me was: only work a few hours a week … Are you kidding me? I can’t even put food on the table for what you’re asking me to make.”

Chris bought a health insurance plan on the state exchange, and with tax credits, got her monthly premium down to about $200. But she was responsible for copays and exams, imaging services, blood work and treatment until she hit her $2,200 deductible, Chris said. After a monthslong application process, the cancer center treating Chris agreed to cover her care for a year. At that point, she was thousands of dollars in debt.

“I can’t pay these bills, but my life is at stake. So this is where the insurance has got you: it’s either you’re going to live or you’re going to die,” said Chris, who previously worked in medical billing and coding.

Nearly 14,000 people or one-third of Long Islanders who bought insurance on the exchange last year signed up for plans in "catastrophic" or bronze tiers, which have high deductibles, according to data from the state Department of Health. These tiers have the cheapest premiums, but highest out-of-pocket costs on the exchange. 

These types of plans attract both big earners, with the means to benefit from a health savings account, and those struggling to afford monthly premiums, insurance brokers said.

“I service some doctors, lawyers, business owners, and they will say to me: I just want the high-deductible,” said Ruthlyn Noel-Joseph, president of Healthwhiz Solutions, an insurance brokerage and patient advocacy firm in Baldwin. “In the event that I’m hospitalized, $4,000 on an income that’s $200,000 — it’s not a big deal.”

“The people who tend to have problems are the ones that are a little bit more income-sensitive,” she said.

Deductibles can be daunting 

A $6,500 annual deductible is causing headaches for Danielle, 37, who asked that her last name not be used for fear that her comments may upset executives at the small firm that employs her husband. Her part-time work doesn't provide health benefits. And her husband's job offers a single insurance plan, which the couple estimated would be more cost-effective than those on the exchange, said Danielle. About 9% of employers surveyed nationwide by the Business Group on Health exclusively offered high-deductible plans, down from about 28% in 2018.

Danielle, who lives in the town of Islip, said she has sticker shock from navigating her husband's recent sleep apnea diagnosis. The plan also won't cover her prescribed migraine medicine until she tries four generic alternatives. For now, she's relying on over-the-counter Excedrin.

“It helps, but it's not the fix,” because Excedrin takes longer to work for her, Danielle said. “It's just disruptive to my life.”

Even informed patients are confused about their deductible, said Ilene Corina, 63, of Wantagh, president of Pulse Center for Patient Safety Education & Advocacy, a nonprofit that promotes patient safety through education, support and training. Corina said she couldn't recall exactly what her deductible is, but she tries to limit medical appointments because of it.

A month or two ago, Corina, 63, went to her annual physical, which she expected her plan to cover because of its preventive nature. But she received a roughly $200 bill. The doctor's office said her checkup became a “sick” rather than preventive visit, Corina said. Staff told Corina she probably said something was bothering her when the doctor asked how she was, Corina said. 

Corina started inquiring about the bill. Eventually, the office told her she didn't have a bill anymore. These types of experiences can dissuade people in dire need, Corina said.

“It's a safety issue,” she said. “People don't always follow up if they're afraid they're going to get billed.” 

Beset by billing issues 

Even when bills are expected, minimizing  them can be cumbersome, said Condon, the Melville resident frustrated by her high-deductible plan.

Condon said she has had several billing issues since first signing her family up for a high-deductible plan in 2023. After a colonoscopy was erroneously classified as a diagnostic service, Condon received statements with various prices, all above $1,000. Her son's annual eye exam cost $672 — seven times more than hers — because the vision component of her insurance doesn't consider it a routine assessment for someone who has strabismus, where one eye turns in a different direction than the other.

Navigating her insurer's appeals process is part of Condon’s routine. She spent four months getting the insurer to cover a roughly $220 collagen crosslinks test, which is used to measure bone density for Condon, who has osteoporosis, a condition that weakens the bones. Three times, her health plan has called the test “unproven,” asked Condon to get a letter from her doctor and then paid for it, she said.

“Do I have to be a scientist and be like, ‘Was this scientifically proven?’ before you give me the blood draw?” said Condon, who works in sales and as a physical trainer. 

The New York Health Plan Association said deductibles have proliferated because people have opted for lower premiums amid rising health care costs. Increases are largely driven by drug manufacturers, hospitals and physicians charging more, despite insurers’ best negotiating efforts, the association's senior vice president Leslie Moran said.

“This is really insurers responding to what the purchaser — both employers and individual consumers — have said they want,” Moran said. “There’s a lot of focus on the cost of premiums.”

By turning to deductibles, health plans target how people use the medical system, but that’s not what’s propelling prices, said Sara Collins, vice president for health care coverage and access at The Commonwealth Fund, a policy group promoting a high-quality, equitable health care system.

“It really comes down to what insurers, what employers are paying providers for their services,” Collins said. “It’s simpler to increase somebody’s deductible than to actually try to do better at the bargaining table.”

Those excluded from the negotiations say they're left without much choice. This year, Condon  selected a plan with a high deductible — one where her employer would contribute $1,000 to a health savings account and she would have a $4,000 upfront responsibility.  

“It does still work out cheaper this way, but it feels very broken,” Condon said.

By Sarina Trangle

sarina.trangle@newsday.com@SarinaTrangle

Sarina Trangle covers affordability and cost of living issues and other business topics. She previously worked as an editor and reporter at amNewYork.