Lydia Mitts Discusses Creating a Smarter Deductible

Lydia Mitts, senior policy analyst at Families USA, explains the concept of a smarter deductible and the short-term impact of lower- and middle-income consumers switching plans and their understanding of their benefits.

Transcript (slightly modified)

What is a "smarter deductible"?

The concept of the smarter deductible is that for those services that we agree all patients should have access to and should be able to get into the primary care doctor if they a chronic condition—like diabetes, the medication to manage that and getting into their doctor to get the tests they need to monitor their glucose levels—having that covered pre-deductible. So having the plan pay for that before a person has met the deductible limit.

And the reason why this is so important is because, especially for lower- and middle-income consumers, paying the full cost of a doctor's visit can be an insurmountable financial barrier. So if we know we want patients to be going in and getting this care, we need to make sure we're designing their benefits in a way that breaks down those barriers, even if they do have a deductible within their plan.

What is the impact of lower- and middle-income consumers switching plans frequently to follow the lowest-cost silver plan? How well do they understand their plans in these instances?

I think it's a challenge in the short term. There needs to be better education, better design of information for new enrollees as they're moving into a plan through summary of benefits and coverage documents that they receive and plan documents they receive. I think especially when we're thinking about the exchange population, which for a lot of them this is the first time they've had insurance, they have lower health insurance literacy, thinking about how to design tools to explain their benefits to them in a way that is really accessible to them is a challenge and something we need to continue to do work on.

I think the other part of this is that there's such diversity and the take-up of pre-deductible coverage. We have some insurers who aren't doing it at all, we have some carriers that are designing a lot of plans that have deductibles but provide coverage for certain services before that deductible is met. So that adds complexity to consumers' decision making process when they're buying a plan and understanding the benefits of pre-deductible coverage when they're shopping for coverage and understanding that that's available to them. It also creates complexity after they have their plan,

I think the hope is that greater adoption of this across the board will make it, even if a person is switching to another plan, the concept of having coverage for something before the deductible will not be so foreign. It might even be something that they're looking to even if they're switching to a new plan.