PhotoJust like auto insurance, most health insurance plans have deductibles – the amount the policyholder pays before the insurance coverage kicks in.

For the most part, these deductibles are set on an annual basis, so that you have to spend the entire deductible amount in a calendar year. At the beginning of each year, the deductible goes back to zero.

In recent years, more consumers have been covered by high-deductible plans purchased through the Affordable Care Act (ACA) exchanges. Just as with auto insurance, a high deductible keeps the premiums affordable because the consumer is assuming more of the risk.

When high deductible plans are a benefit

For people in good health, who are making little use of health services, a high-deductible plan might be a good thing. They pay low premiums but are covered in the event of a catastrophic illness or injury.

The problem comes in when the insured is not in good health and suffers from a chronic disease. These consumers might spend thousands of dollars of their own money each year before their health plans begin to pay.

Researchers writing in JAMA Internal Medicine explored the impact of high-deductible health plans, which they say now cover 40% of consumers who buy their insurance through the exchanges or get it through an employer.

Costs 10% of total income

For consumers under age 65, the researchers found that having a high deductible health plan means someone with a chronic condition is likely to pay 10% or more of his or her total income for health-related costs.

Despite that, the researchers said the subjects in the study said their out-of-pocket costs had not prevented them from obtaining needed medications.

“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.”

In 2013, during the study period, a health plan was considered high-deductible if patients were required to pay the first $1,250 in care costs for an individual or $2,500 for a family.

High deductible plans offered through employers and the ACA Marketplace now commonly required deductibles of $6000 or more.

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