Cons of High Deductible Health Insurance for Older People

High-deductible health plans, or HDHPs, are an alternative to traditional health insurance. They offer low-cost coverage for a wide range of conditions and treatments, but only begin to pay out once the policyholder has already contributed a large amount of personal money to health care. Some HDHPs have deductibles in the thousands of dollars, which means they can help in the event of a major health crisis but are unlikely to pay anything for more minimal care.

Policy Cost

• Although the monthly cost of high-deductible health insurance is relatively low, it may still place a strain on an older person's budget. Individuals and couples on fixed incomes are responsible for paying the monthly premiums on an HDHP even as that plan's cost rises over time due to inflation. Programs like government-sponsored Medicare offer low- or no-cost treatment specifically for older people. Unlike HDHPs, Medicare doesn't need to make a profit for the insurance provider, and so costs to consumers are much lower.

Cost of Care

• For older consumers with a higher risk of health problems and a greater need for regular doctor visits and testing, HDHPs may not offer adequate financial coverage. HDHPs are more appropriate for young, healthy consumers who have little or no need to seek health care on a regular basis. When someone with occasional or frequent health needs buys an HDHP, it raises the likelihood of paying the full amount of the deductible in addition to the monthly premiums. According to The Commonwealth Fund, 54 percent of adults with an HDHP reported difficulty paying for health care.

Incentive to Neglect Care

• Knowing that basic medical care will come at a high personal cost may drive some older HDHP policyholders to neglect personal health maintenance or delay seeking care until a problem becomes severe. Conditions that would be easy to treat with low-cost medication may evolve into expensive, life-threatening problems as a policyholder attempts to wait out an illness or delay paying the cost of treatment.

Burden to Families

• Failure to seek basic medical care may shift the burden of care from doctors and medical staff to families. Hiring an in-home caregiver or taking time off work to care for an older family member with an HDHP may in fact cost less than paying the deductible for traditional medical care. Patients who neglect their own health may also increase the risk of spreading disease among household residents.