Would the World End if We Eliminated the Deductible?

While Congress ponders a true fix for the Affordable Care Act (ACA), consider this about health coverage.

Problem #1, Can’t Use It: Healthy people, or people who don’t make a lot of money, sign up for the cheapest health insurance policy available. It gives them catastrophic coverage, protecting their family and home in the event of a big-time medical condition. But it also makes them mad. They pay a monthly fee for health insurance they can’t use until a large deductible is satisfied. For example, a person might pay $300 a month but have a $7,000 deductible. Do the math. That’s well over $10,000 before that person gets to use what they are paying for every month.

Problem #2, January Comes Too soon: Health is not an annual event. Maybe you go all year and suddenly need a bunch of medical help in December. The deductible hasn’t been reached so you pay the bill “out of pocket.” Nasty, because in January you still need medical care for the same thing, yet the deductible goes back to square one. Not nice. This makes more people mad. Solution for Problem #1 and Problem #2: eliminate all annual deductibles and replace with co-pays.

Problem #3, We Need To Build a Wall: Even by eliminating deductibles there are people who are required to pay more than they can afford. Fixing or replacing the ACA needs to build a wall of protection that limits the total amount—a percentage of income—paid by individuals or families in a calendar year—a guarantee that includes the cost of prescription drugs.

Livongo’s Post Ad Banner 728*90

Categories: OP-ED, Uncategorized

Leave a Reply

3 Comment threads
2 Thread replies
Most reacted comment
Hottest comment thread
5 Comment authors
JuliePaul @ Pivot ConsultingLLCPeterjamesepurcellMargalit Gur-Arie Recent comment authors
newest oldest most voted

I am one of those that pretty much pay $300 for premiums yet also has a $8,000 deductibles. I cannot exactly agree that it is “affordable” but it is the only plan that I can afford. I think it’s ridiculous how I am paying at least $300 a month, yet when I see a doctor I can be slapped with another massive bill- including office visit cost, lab fees, and prescriptions.What frustrates me with the cost of deductibles and cost of medications being so high, it’s nearly impossible to call it “affordable” unless I avoid going to the doctor in… Read more »


I am beyond confused. Health insurance, like any other insurance, is essentially a financial transaction. Somehow socializing it to require insurers to pay out more than they take in is a tad harsh. And making affordability, whatever that is, the key to strategizing makes no sense to me either. What you really are suggesting is that the government make this a “right” funded by general tax revenues and do away with insurers entirely. But you’ve used an odd way of putting that. And I must say that health insurance has morphed such that it covers so many predictable and everyday… Read more »


“What you really are suggesting is that the government make this a “right” funded by general tax revenues and do away with insurers entirely.”

That’s a start. Tell me James, what have insurers done for us. Controlled health costs – no, made insurance more accessible – no, made health care more affordable – no, reduced paperwork -no. In the case of BCBS at least, paid out higher bonuses – yes.

Paul @ Pivot ConsultingLLC

Re: “health insurance has morphed such that it covers so many predictable and everyday things, that it’s really not insurance any more. It’s a financing mechanism; but one that too many people are suggesting be done without the rigors needed to avoid bankruptcy. ”
Well said!
Re Peter’s point below: while I agree that insurers have not been particularly effective in driving reform that slows the rate of growth while improving value/quality.. they aren’t the root cause of the problem and if we got rid of them as Peter suggests we will descend into a deeper intractable mess.

Margalit Gur-Arie

No, the world is not going to end, because this is what universal coverage, financed by progressive taxation, looks like. Let’s do it…..