Health Insurance Deductible Financing: The Growing Need for Accessible Payment Plans to Cover Out-of-Pocket Expenses

 In patient financing

Since the Affordable Care Act was signed into law, the number of insured has been on the rise, meaning patients have greater access to high cost procedures crucial to their health, but a noticeable roadblock has started to emerge blocking the path to payment for many patients… high deductibles. The downside of insuring those with preexisting conditions is that higher deductibles are unavoidable. With stagnant wages, rising medical costs, and increased insurance costs, the purchasing power of patients is on the decline but their need for quality healthcare has not changed.

 

The average deductible for an unsubsidized Bronze plan under the ACA is $5,731. For a middle-income family facing a high cost surgery or procedure, this could be a devastating blow considering that many families don’t have that kind of cash available after paying for everyday expenses. Creating an easily accessible path to payment for patients on a budget relieves a heavy burden and allows families to stay focused on the decisions that matter most, those concerning their health and not their pocketbook. While patients have some options in terms of payment plans, most options fall short on either the administrative or patient side.

 

In-House Billing

 

When administration staff cannot collect full payment up front, patients are often put on payment plans. Problems often arise when busy administrators try to act as a bill collector in addition to all their other responsibilities. Outstanding receivables start to pile up and patients stop returning phone calls. As deductibles increase and out-of-pocket costs rise, more and more patients need payment plans or patient financing to pay off their balances resulting in expanding collection problems.

 

Medical Credit Cards

 

Medical credit cards are a very popular option in today’s market for financing out-of-pocket medical expenses. Administrators often utilize 3rd party credit card programs to outsource billing and collections and to get upfront payouts for qualified patients, greatly improving cash flow. While these credit cards often carry short-term promotional terms that can be attractive to patients, high default interest rates often over 26% only create more financial trouble for patients. Patients often fail to recognize the pitfalls of these credit cards when faced with a serious medical procedure, putting the focus on their health and not realizing the long-term financial repercussions.

 

For administrative staff, the best approach in most cases is for professional bill collectors to collect the bills but the bill collectors don’t need to be the bad guys. Simple, straight forward payment plans with fixed terms and no “gotcha rates” will be crucial to the financial health of families facing rising deductibles as well as for administrators that want to leave their patients in good hands while still getting up-front payouts to help manage cash-flow.

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