High-Deductible Health Plans May Be Expensive for People with Chronic Illnesses
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High-Deductible Health Plans May Be Expensive for People with Chronic Illnesses

The chronically ill often spend at least 10 percent of their total income on out-of-pocket expenses

January 11, 2017

If you have a health insurance plan, you know that you also have something called a deductible—the amount that the policyholder pays for healthcare services before insurance begins to cover the cost.

In general, health insurance deductibles are calculated and set annually. This means that the policyholder has to spend the whole amount in one calendar year. The deductible amount returns to zero at the start of every year, forcing the policyholder to start all over when paying for healthcare services.

Ever since the Affordable Care Act was passed in 2010, more and more people have bought high-deductible plans on the marketplace exchanges. High deductibles keep premium amounts at affordable levels by placing more of the risk on the consumer's shoulders.

These plans can benefit people in good health who rarely use health services. These consumers pay a low premium but have coverage in case of a catastrophic illness or injury.

However, the plans are less beneficial for people in poor health or who have a chronic disease. These people can spend thousands of dollars out of their own pockets every year before their insurance plans start to pay for health services.

Researchers have been studying the consequences of high-deductible plans, which they believe now cover 40 percent of people who buy their plans on the marketplace or get it through an employer.

They found that people under the age of 65 who are covered by a high-deductible plan often have to spend 10 percent or more of their total income on healthcare costs.

In spite of this fact, said the scientists, the study participants claimed that such out-of-pocket costs had not stopped them from getting medicines that they needed.

"Increasingly, these plans have become woven into the fabric of health insurance in America, so it's important to look at the impact of deductibles on people who need care on an ongoing basis," says senior author Dr. Jeffrey Kullgren of the University of Michigan medical school. "Not only on how they spend their money on care for their day in, day out health needs, but also how that affects spending in the rest of their lives."

Health plans were considered high-deductible in 2013—the year when the study was conducted—if patients had to pay the first $1,250 in healthcare costs for one person or $2,500 for a family. In contrast, high-deductible plans offered to consumers through their employer or the marketplace now often require them to pay $6,000 or more before their coverage will kick in.