Weapons of Mass Corruption (Part 3, 2025 Series): Deductibles
Deductibles are costing Americans billions — and the reasons may surprise you.
💸 The Myth of “Skin in the Game”
Deductibles are often defended as a way to make people more responsible healthcare consumers — to give them “skin in the game.” The idea is that if people have to pay out of pocket, they’ll shop around for lower-cost care.
But here’s the problem: they can’t.
The lowest-cost care is almost always the cash-pay price, and that doesn’t count toward your deductible. So even if someone finds a cheaper option, they’re penalized for using it. And most people don’t have the time or tools to comparison shop in the first place — especially when insurance plans are so complex and opaque.
🧾 The Confusion at the Front Desk
When patients arrive at a clinic, they often present their insurance card without knowing what they’ll owe. They’re either asked for nothing or just a co-pay. In both cases, they may assume the visit is covered — until a surprise bill arrives weeks later.
And if they ask, “How much will this cost?” the answer is usually:
“It depends on your insurance.”
This lack of transparency is not just frustrating — it’s financially damaging.
🏚️ A Borrowed Concept Gone Wrong
The idea of a deductible comes from property insurance — like auto or homeowners insurance — where claims are rare and deductibles apply per incident.
But in healthcare, deductibles are accumulated over time. This model doesn’t make sense for routine or preventive care. It leads to irrational decisions, like paying $1,200 for a $400 service just because it’s “in-network” or “counts toward the deductible.”
📊 The Numbers Don’t Lie
• 80% of people on high-deductible health plans (HDHPs) never meet their deductible.
• Even after meeting it, they often still owe co-insurance until they hit their out-of-pocket maximum.
• Despite this, 90% of HDHP enrollees still present their insurance card and pay the negotiated rate — which is rarely the best rate, because it’s not the cash-pay rate.
This means we’re overpaying almost every time — the exact opposite of smart consumer behavior.
🧠 The Takeaway
Deductibles were meant to encourage better decision-making. Instead, they’ve created a system where:
• Patients are confused
• Prices are hidden
• Incentives are misaligned
It’s time to rethink how we structure cost-sharing in healthcare — because the current system isn’t just inefficient, it’s economically irrational.
[1] Based on 2025 data from the Kaiser Family Foundation, the majority of enrollees in high-deductible plans do not reach their deductible threshold in a given year, leading to significant out-of-pocket spending without insurance coverage kicking in.