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The lowdown on high deductible health plans (Hint: there are risks)

Fanatic Studio/Getty Images/Collection Mix: Subjects RF

Health plans that require consumers to spend thousands of dollars before insurance kicks in are more common than ever before.

About 40 percent of Americans have health plans with $1,200 or more in deductibles.

The plans are meant to push consumers to make smarter health care choices, but a new study from USC has found they put some people at greater financial risk. 

The research, in the April edition of the American Journal of Managed Care, shows people with chronic health conditions, and those with lower incomes, are the most likely to be impacted by a high medical bill stemming from the deductible.

"When they face this bill, it has a serious consequence for them. Not every family can absorb a $2,000 bill without changing their lifestyle," said Neeraj Sood, Director of Research at the USC Schaeffer Center for Health Policy & Economics.

"The most vulnerable populations are the ones who are going to face the highest risk."

To see how a high deductible plan might affect you, here's a breakdown of how they work - and what to look out for:

What does high deductible mean, exactly?

The premium is your monthly payment that keeps your name on the health insurance rolls. The deductible is the amount you have to pay before the health insurance kicks in. It could be anywhere from $1200 to $2000 or $3000 - even up to $10,000.

Why would someone buy a high deductible plan?

They're cheaper--sort of. High deductible health insurance have lower premiums. So, you pay less each month. But if you get sick and don't have the money to cover the deductible, you could be stuck paying a big medical bill.

This is typically a safer purchase for someone who is healthy, so is not expecting to need medical care, but could afford to shell out the money if they end up having see the doctor or go to hospital.

Employers can sweeten the pot with a pre-tax Health Savings Account. That's where you can stash away money for future medical bills. Some employers even chip in.

Basically, buying a high deductible plan is wagering that you won't get sick.

Why do these exist?

The plans are designed to steer consumers away from low value care (things like unnecessary tests) in a bid to cut down medical costs.

"They were sold on the promise that 'we're going to put consumers in charge and they're going to make better decisions for themselves,'" said Sood.

It turns out in this case people aren't very good at making choices for themselves.

"People are just cutting costs across the board. They're not cutting costs saying, 'this procedure is unnecessary I shouldn't have it,'" he explained.

Sood says his research shows Americans are more likely to do things like skip their medications when costs get in the way.

How could this impact someone's health care?

Take Chip Bolcik. He's a 60-year-old semi-retired playwright from Thousand Oaks who lives on a fixed-income.

His premium through Covered California is $1220 a month since he doesn't qualify for a federal subsidy. But to keep his premium as low as possible, he's chosen a plan with a whopping $7200 deductible.

Bolcik rarely uses his health insurance because of the deductible. He does take advantage of his free annual wellness visit, which is part of the Affordable Care Act, but he asks a lot of questions if the doctor wants to check anything.

"For every single thing, every test, everything, ‘Is this covered?’ and if it’s not covered, I have to say ‘how much does it cost?’ and then if he says a price that’s too high I have to start bargaining," said Bolcik.

He even feels deterred from getting screenings that he would be covered for.

"Because I’m so fearful of the costs, I am in fact fearful of even checking to see what some of the screenings are that are available to me," said Bolcik.

This means Bolcik hasn't gotten a colonoscopy or checked on his liver function, despite having a hereditary condition. 

He says being middle-class doesn't protect him from the financial worry associated with his high deductible plan.

"I just don’t feel like I’m part of the medical system anymore. I feel like I’m an outsider, even though I’m paying these huge premiums to keep the insurance company healthy," said Bolcik.

He's not alone.

Another recent study out of Harvard University showed women with high deductibles were less likely to follow up with diagnosis or breast cancer treatment than women with traditional health plans. In the case of breast cancer, delays could mean critical time lost in treating the cancer.

USC's Neeraj Sood warns however that more research needs to be done before we can conclude tie a  direct link between high deductibles with overall poor health outcomes.