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High Deductible Plans Equal Lower HealthCare Spending

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There may finally be some good news on the Texas health insurance front. In a recent study, researchers determined that total U.S. healthcare costs increased 3.8 percent in 2009 and 3.9 percent in 2010. Yes, that’s an increase, but it’s the slowest annual growth rate in 50 years! Much of the credit for this slowdown goes to consumer-directed health plans, in which consumers have greater control over their healthcare expenditures. When people are in the driver’s seat, rather than corporations, people have a tendency to spend wisely, which positively impacts the entire healthcare system.

 

Of course, the Obama administration is attempting to take credit for the slowed spending, citing changes implemented as part of Obama’s Patient Protection and Affordable Care Act. But according to Forbes.com

Obamacare has nothing to do with it. Healthcare costs started to plateau well before Obamacare began taking effect. And the trend closely tracked the spread of consumer-directed health plans — high-deductible, patient-centric coverage options that give people control over their healthcare dollars and provide a direct financial incentive to conserve care and spend responsibly.

Oddly, ObamaCare might erase the cost-savings benefits we’ve seen over the past couple of years. In fact, his health care plan is targeting the very consumer-directed plans that started the cool down in the first place. The Centers for Medicare and Medicaid Services show that the growth rate of health costs didn’t start waning in recent years. It’s been slowing down since 2002, which happens to be the year that employers began offering high-deductible health insurance plans for their employees. And since 2006, the adoption of such plans has been rapidly increasing. It makes sense. People like having control over their healthcare finances. By paying a low deductible, they keep more of their money each month and only spend when they deem it necessary.

The Forbes story notes that a study from the RAND Corporation finds that “the average American worker who switches from a traditional health plan to a consumer-directed one uses 14 percent fewer medical services — without any associated adverse effects on health outcomes.”

Sounds good, right? Then why is Obama’s healthcare law on the verge of killing these plans? Regulations will make consumer-directed healthcare plans almost impossible for insurers to offer, which might mean they’ll disappear from the market altogether. Perhaps Obama thinks that we can’t be trusted with our own money and our own health.

But the numbers don’t lie. When people are put in control of their own healthcare spending, costs decrease across the board. Let’s hope ObamaCare doesn’t ruin what’s already proven effective, and instead expands access to and encourages adoption of these financially-sound health insurance plans.

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