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Yes, it's nice not to have co-pays, but here's the surprising side effect of high-deductible insurance plans.

Ellen Seidman
February 02, 2015

Opening the mail these days is never fun, given that the people typically sending you stuff are the ones who want money from you. Sure enough, in last night's delivery, there was an Explanation of Benefits from our insurance company. We owed a big chunk of change for several recent doctor visits. [INSERT DEEP SIGH.]

Our health insurance plan has the highest deductible we've ever had, and a lower percentage of coverage even once we hit our deductible. The lack of co-pays, which seemed like a perk at first, are small-potato savings. We're hardly alone here: Of the 1,000 Americans with private insurance recently surveyed, more than a quarter have a high-deductible plan, per a poll taken by the Associated Press-NORC Center for Public Affairs Research. In the last five years, the average deductible has risen nearly $400—not a typo!—from $826 to $1217, finds a health benefits survey by the Kaiser Family Foundation.

"High-deductible plans are getting more popular with employers because they are overall cheaper for them," says Michelle Katz, MSN, LP, author of Healthcare Made Easy ($14, amazon.com). "Under Obamacare, too, some people are still looking at a high-deductible plan."

Scarily, the soaring coast of healthcare is literally making people sick. In the AP survey, almost 30% of people polled didn't go to the doctor when they were sick or injured because they were worried about costs. This is exactly why last year the American Academy of Pediatrics discouraged the use of high-deductible plans for children, concerned that parents would skip necessary care.

Given the choice between a plan with a lower premium and higher deductible, or a higher premium and lower deductible, which should you go for? "Neither!" says Katz. "Your best bet is to make sure a plan includes the doctors and labs you use, a hospital you like and the drugs you need, and go by that. If a provider you use is not in a plan, for example, it could get expensive—and you might end up needing to switch."

Seems like no matter what, though, healthcare is going to be eating up an increasingly large chunk of our paychecks. [INSERT DEEP SIGH.]

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