While addressing the moral imperative to ensure that low-income Americans can afford health insurance, Paul explained that his experience in his own medical practice highlights the wisdom of high-deductible, “consumer-driven” plans, or forgoing insurance altogether and paying in cash:
Capitalism has not been tried yet in health care. Most of health care is government-fixed prices and there’s very little capitalism. In fact, I’m a physician. In my practice, about 3% of my practice was capitalism. Those are people who came in with high deductibles or paid cash.That marketplace worked because we did bid down prices on things that people came in and paid for.
High-deductible plans, which offer lower premiums but charge much higher deductibles, originated as a means of covering “catastrophic illnesses” — those that require long-term, complex, and often high-cost care. The prevalence of employers making high-deductible plans their employees’ only coverage option has jumped in recent years, and most companies agree that the trend will continue for the foreseeable future.
Proponents of high-deductible health plans claim that they curb health care costs by providing consumers a market incentive to lead healthier lifestyles. But this “market-based” approach involves massive cost-shifting from hospitals and providers onto consumers, forcing sick Americans to choose between exorbitant out-of-pocket costs and forgoing treatment. Such plans also disproportionately affect those who require ongoing care or have chronic illnesses.
Studies and surveys have shown that consumers enrolled in high-deductible health plans are considerably less satisfied with their coverage than those with traditional insurance. Only 33 to 42 percent of high-deductible consumers are satisfied with their plans, versus 63 percent who are satisfied with their traditional plans. Furthermore, the idea that shifting costs onto consumers will force them to change their health-related behavior doesn’t hold water because 70 percent of national health costs derive from 10 percent of the population. That 10 percent consists of the Americans who have such extensive health care needs and high medical costs that their treatments fall well outside the scope of their deductibles — so in many cases, they don’t have either the incentive or the ability to choose to lead healthier lifestyles.