Cost-benefit differences vary
widely, hinge upon disease
management demands

Picking the right insurance can be 'counterintuitive' for seriously ill buyers

June 10, 2016
by John W. Mitchell, Senior Correspondent
A Duke Health study team posing as a 55-year old man with leukemia identified likely points of confusion in choosing the right health care plan to buy. The team found that such a patient would reach their out-of-pocket cap in about a month, which should be factored into the health insurance buying decision.

“We have very little data on how patients make health plan selections, and we don't know whether they have enough information to make the appropriate selection,” Dr. Yousuf Zafar, lead author and associate professor in the School of Medicine and the Sanford School of Public Policy at Duke University, told HCB News. “I was interested in learning how patients might select health plans in the face of a chronic illness like cancer.”

This is an important consideration for a leukemia patient who needs lifesaving drug therapy for years. According to Duke sources, the primary drug therapy is the 24th most expensive drug in the U.S. But high monthly co-payments can reduce patient compliance in taking their medicine.

Zafar, a medical oncologist, thinks that some policy tweaks may be in order. “Policy makers should be looking for ways to simplify benefit design and should understand that current out-of-pocket maximums do not necessarily protect patients from financial strain,” he said.

For example, Zafar noted that in their secret shopping exercise on the North Carolina Health Exchange that patients with higher income might be more likely to benefit from a bronze plan rather than a silver tier plan when the premium difference is weighed against the out-of-pocket obligation.

The hypothetical patient was assigned varying incomes, from 100 percent to 300 percent of the poverty rate. Using those criteria, the hypothetical patient was eligible for 141 bronze and 210 silver plans across six counties in the state.

“The annual out-of-pocket maximum does not reflect the true amount a patient might pay in a year because of premiums, excluded care and out of network care, for example,” added Zafar.

He said that despite stated out-of-pocket expenses, patients need to understand they could be on the hook for additional expenses, especially if they have a lot of interaction with the health system.

“Patients should understand that benefits and protections between metal tiers (bronze, silver and gold) vary considerably,” Zafar cautioned. “We found that buying a plan can be confusing, if not counterintuitive.”