How to Help Your Patients Navigate the Annual Deductible Reset

Let’s face it. Your patients lead busy lives. Some may be trying to manage multiple chronic conditions. Others may be juggling work, family, and the demands of everyday life. Considering all these stressors, their annual deductible reset isn’t always top of mind. That’s why it’s important to remind them that the patient responsibility could change at the beginning of each new year. The cost difference for care could be significant, especially for the growing number of people with high deductible health plans (HDHP).

When you educate patients about the deductible reset at the beginning of each calendar year, it can help improve patient collections, solidify the patient-provider relationship, and boost the patient financial experience. This article explains how you can engage patients in conversations about the deductible reset and why it’s important to do so.

Talking with Patients About the Annual Deductible Reset

Over time, many patients get used to paying a standard copayment amount for healthcare services and may plan ahead to manage their finances accordingly. Patients may appreciate a sense of predictability and stability. Then January 1 rolls around. Patients come in for a procedure or other service, and those with an HDHP receive a much larger bill than they may have paid previously. They may not understand that the patient responsibility may have changed once the deductible resets. This confusion can negatively affect the patient-provider relationship and potentially erode patient trust. The good news is that proactive education about the patient deductible can help.

One of the biggest reasons to educate patients about the deductible reset is that it may have a profound effect on a large portion of your patient population. In 2021, 55.7 percent of the U.S. private-sector workforce was enrolled in an HDHP, according to a ValuePenguin analysis. (Note: In 2023, HDHP plans have a deductible of at least $1,500 for an individual or $3,000 for a family.)

When the deductible resets, patients are responsible for the entire deductible amount before their insurance coverage kicks in. They may also need to pay monthly premiums, some of which have risen higher than wages and inflation. Helping patients understand their potential financial responsibility after a deductible reset can improve the overall patient financial experience while simultaneously improving patient satisfaction. When patients understand that their bill is accurate, they feel more comfortable paying it.

This education is invaluable to all patients and especially those with an HDHP, many of whom want to make cost-conscious decisions. More than a third (36 percent) of patients with an HDHP said they checked the price of a doctor’s visit, medication, or other service before receiving care, according to the 2021 Consumer Engagement in Health Care Survey conducted by the Employee Benefit Research Institute and Greenwald Research. Nearly a fifth (18 percent) developed a budget to manage healthcare expenses, the survey found. Providing accurate billing information can greatly improve the patient experience and possibly empower patients to make decisions that better fit within their budget.

Even if patients are aware of the annual deductible reset, some may feel uncomfortable bringing up financial concerns and choose to delay care instead. According to a Gallup poll, in 2021, 38 percent of patients delayed care because of the cost. When patients postpone necessary care, they may require higher hospitalization over time. It’s important to spark conversations about the deductible reset and any changes in patient responsibility. It’s also helpful to provide options for patients to pay over time, including flexible patient financing options that help patients manage the cost of care with convenient monthly payments.

Mitigating the Impact of High Deductibles on Providers

HDHPs don’t just affect patients; they impact providers, too. When patients don’t understand their financial position after a deductible reset — or they aren’t connected with the right financing options to make care more affordable — providers could end up eating those costs if patients are unable to pay. In fact, uncompensated care, where the health system or practice provides care but receives no payment, has been on the rise over the last decade. Between 2000 and 2020, hospitals provided more than $745 billion of uncompensated care, according to the American Hospital Association (AHA).

The financial stress of uncompensated care could possibly impact your ability to provide an optimal standard of patient care. As uncompensated care increases, you may have less financial flexibility for essentials like paying physicians and employees, obtaining essential supplies, or providing other health and wellness initiatives. Educating patients about the annual deductible reset may enhance your ability to collect patient payments and reduce uncompensated care.

How to Start a Conversation with Patients About Their Deductible Reset

Consider these strategies to start discussions about the payment deductible.

1. Think proactively. Routinely incorporate financial conversations into your patient’s first visit of the year. Consider reminding patients that their deductible may reset and helping them understand what the reset means in terms of patient responsibility. Also, you may want to educate patients on how to understand an Explanation of Benefits so they can track how close they are to meeting their deductible or reaching their out-of-pocket maximum as the year progresses.

   Likewise, when you discuss patients’ health-related goals and recommend treatment plans that may require multiple visits and procedures, you can take the opportunity to ask about potential financial barriers and educate patients about payment options.

2. Empower patients; provide resources. Remind patients where to find the customer service number for their insurance company and encourage them to call and ask these questions:
   • What is my patient deductible? Is my deductible different for in-network vs. out-of-network providers?
   • When does my patient deductible reset?
   • Which types of appointments count toward my deductible, and which ones don’t?
   • What are my out-of-pocket costs?
   • What is the annual out-of-pocket maximum?

   Keep in mind that your patients may not understand basic health insurance terms. For instance, 45 percent of Americans in a Forbes Advisor survey couldn’t correctly identify what a health insurance deductible is. Consider providing your patients with a glossary of terms, so they feel more confident when calling their health insurance company. The glossary could include definitions for an HDHP, deductible, preferred provider organization, out-of-pocket maximum, in-network vs. out-of-network status, and more.

3. Reconsider what’s necessary. If cost is a concern, physicians could assist patients in prioritizing their needs. In these cases, patients may be able to address certain health issues sooner and wait until they’ve met their deductible to pursue other procedures or services without compromising their healthcare journey.
4. Promote preventive care. Under the Affordable Care Act, most private insurance and group health plans must provide preventive care at no out-of-pocket cost to the patient. Consider encouraging your patients to take advantage of these services so they can identify and address future potential health issues once the deductible reset occurs.
5. Present financing options. With rising healthcare costs, it’s important to assist patients along their financial journey. You may want to offer patients several ways to make their care more affordable, including flexible financing to help them fit care into their monthly budget.
6. Consider external payment solutions. For example, patients may be able to access options through their employers, such as health savings accounts, health reimbursement accounts, flexible spending accounts, and medical savings accounts. Some nonprofit organizations connect patients with financial assistance programs. For example, JDRF funds diabetes research and the Patient Advocate Foundation assists eligible patients to cover copays and other expenses. Patients may also be able to take advantage of grants to help pay for drug costs. Moreover, some pharmaceutical companies offer patient financial assistance programs.

Conclusion

You can foster trust by serving as a source of accurate and easy-to-understand financial information, including a resource on patient deductibles. For example, you may want to proactively educate patients about what happens after a deductible reset and how they can prepare for their financial journey. You can also answer questions and provide patients with resources that address the patient deductible and define key terms related to the patient payment process. An annual deductible reset doesn’t need to be a time of confusion and anxiety for patients. It can become an opportunity to improve the patient-provider relationship as well as the patient financial journey.

About the Author

Lisa A. Eramo

Lisa A. Eramo is a freelance healthcare writer with more than a decade of experience writing for healthcare executives, managers, physicians, and consumers. She contributes to various trade publications and also assists clients with healthcare content marketing efforts. Learn more at www.lisaeramo.com.