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June 05, 2007

High deductibles a pain for some insured

When Nancy Warrington became pregnant five years ago, she quit her job to become a full-time mom. With that, she lost the family's employer-subsidized health benefits.

Shopping for individual health insurance on their own, Warrington and her husband, Todd, settled on a plan with a $2,500 annual deductible and a $335 monthly premium.

"We were just looking for something [with a premium] we could afford," said Warrington, 35. "The high deductible didn't even dawn on me."

The insurance was a mixed blessing. Although it covered Nancy's appendicitis, Todd's back injury and an assortment of other medical needs over the years, the annual deductible also saddled the San Diego couple with more than $10,000 in debt.

Their case illustrates a problem with high-deductible health plans, a fast-growing type of coverage now held by about 10 million people in the U.S. The plans, with annual deductibles of $1,000 or higher and monthly premiums that can be less than $100, are a good fit for relatively healthy people with some financial means, most experts agree. The median annual income of those using high-deductible plans is about $75,000, according to a recent federal report.

The plans also are popular with young people who don't expect to run up significant medical bills.

Although the lower premiums make the plans attractive, cash-strapped families like the Warringtons run the risk of being unable to afford the deductibles, critics of the plans say.

Such consumers might forgo needed medical treatments to avoid running up out-of-pocket bills — possibly threatening their physical well-being, critics say. For these and other reasons, such plans are far from a desirable solution for the nation's approximately 47 million uninsured, they say.

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Posted by healthinsurance at June 5, 2007 04:34 PM