Health insurance deductibles typically only go one direction: up.
It's not unusual for people these days to be responsible for paying thousands of dollars in medical claims before most plan benefits kick in.
Rewards to policyholders for claims that don't meet the annual deductible can be a boon for healthy people. But the approach might not pass the smell test next year when the Affordable Care Act bans discriminating against people based on their health.
A "deductible credit" program, sponsored by UnitedHealthcare's Golden Rule Insurance Co., is available in 26 states on most of the company's renewable plans sold on the individual market, according to Ellen Laden, a spokeswoman.
Here's how it works: If someone has a plan with, say, a $3,000 deductible and doesn't have that amount in claims the first year, the deductible is reduced by 20 percent, to $2,400. The following year, the deductible falls by another 20 percent if the deductible isn't met, to $1,800. The third year, the amount can shrink another 10 percent, to $1,500, half the original deductible and the maximum reduction allowed under the program.
"It's a way to retain customers," says Carrie McLean, a senior manager of customer care at eHealthInsurance.com, an online vendor. Policyholders who might otherwise go shopping for a plan when they get their annual rate increase may be persuaded to stick with the same company if they think they're getting a better deal than they could elsewhere, she says.
Of course, as deductibles have risen in recent years, people are less likely to meet them. According to an analysis by eHealthInsurance.com of one large insurer's 2012 claims, just under 11 percent of people with a $2,500 deductible met the deductible for that year. For those with a $5,000 deductible plan, the figure dropped to just under 4 percent. Only 3 percent of people with a $7,500 deductible had that much in claims, and at the $10,000 deductible level the figure was just over 2 percent.
That's not true for the smaller number of people with serious medical conditions. Many of them regularly meet and exceed even high deductible thresholds.
Starting next year, the Affordable Care Act will prohibit insurers on the individual market from denying coverage to people with pre-existing conditions or charging them more.
And Timothy Jost, a health law professor at Washington and Lee University, said the deductible credit program could be considered discriminatory under the federal health law next year.
"It's designed to permit continued cherry picking of patients," he says.
Golden Rule's Laden says the company is still finalizing its strategy for next year.
"We're currently reviewing the Affordable Care Act and its impact on the deductible credit feature to ensure that our products and practices remain in compliance with it and all other applicable laws," she said in a statement.