Wonks Anonymous is not surprised, having spent the past few years watching this transformation of health insurance happen from the inside. If you follow this site you have probably heard this one before. If you are new here I will provide a brief summary of what is happening:

High Deductible Plans are the only growing segment of the health insurance market. They require the insured to pay significant sums, $2,000 to $5,000 per individual, before the insurance company is required to begin coverage. An adult with $50,000 annual income and a $5,000 deductible policy qualifies as underinsured. Wonks Anonymous invites the reader to ask him or herself how they would fare if they had $50,000 per year and were suddenly required to pay $5,000 in medical bills.

High Deductible Plans are growing because more comprehensive plans are shrinking. In particular employers cannot get enough of the high deductible plans. They are cheap but still allow the employer to tell employees that they have health insurance. Companies are supposed to inform their employees when the health insurance plan changes but, in my experience, they often leave this unpleasant task to the business staff at the doctor's office.

Sick people hate high deductible plans. For this reason insurance companies love them. Insurance companies are constantly trying to insure healthy people who will not need insurance. People who have experienced illness generally pay attention to their health insurance and try to get a policy that will actually pay for medical care. When they can, they avoid high deductible plans. 

Health insurers love to pass these customers off to kinder, gentler insurance companies. Kinder, gentler health insurance companies either go out of business or adopt the high deductible strategy in self defense. For insurers there is no down side to high deductible plans. This trend will continue.

Now for the individual and social consequences of high deductible plans:

People will spend less on non emergency medical care. A doctor's office visit runs about $75 to $100. A construction laborer or hotel maid will certainly think twice before seeing a doctor for a headache or a bad cough.

Long term costs for people with high deductible plans will be higher than they are for people with comprehensive insurance. People will wait to seek treatment until they feel quite ill. At this point the cough may have become pneumonia and the high blood pressure that has caused the headaches may have done damage to major organ systems. At this point expensive treatments will be required for extended periods of time.

Insurance companies will not really have a problem with this one. A great part of the expenditure will still be borne by the insured and, when it comes time to renew the policy, the rates can always be raised. One of the major causes of individual bankruptcy is unexpected health problems. Bankruptcies will increase.

Doctors and hospitals will find themselves absorbing more losses from uncompensated medical care. When the child covered by a high deductible plan shows up in the emergency room with a severe asthma attack and needs to be hospitalized the parents will probably be unable to pay the $5,000 deductible. The insurance company will not pay. Guess who gets to absorb it?

Looked at from the health insurers' point of view high deductible plans are the path to a bright and profitable future. For the rest of us they really do deserve to be called catastrophic health insurance.