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High Deductibles? Or High Premiums?

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Back in my long-ago college days, my friends and I sometimes would engage in deep, drawn-out late-night discussions around questions such as:

Would you rather burn to death in a fire or drown in the ocean?

Would you rather get paid megabucks for doing something you absolutely hated or earn next to nothing doing something you absolutely loved?

Would you rather date a gorgeous-looking guy with the IQ of a box of rocks or date a hideously ugly dude with the intelligence of Albert Einstein?

Consumers today are being pushed into playing a different version of the “would you rather” game, and losing the game could be costly. The question goes like this: Would you rather pay a higher premium for health insurance or face a higher deductible? Getting this one wrong could cost thousands of dollars.

A survey by Bankrate​.com attempted to find out how Americans really feel about the premium-or-deductible question. The survey found that more than four in 10 Americans prefer a high-deductible plan with a lower monthly premium. Thirty-six percent of those surveyed would opt for the low-deductible plan with a higher monthly bill, and nine percent would not choose either of these two options.

The high-premium plan was favored by those in the $30,000–49,999 household income bracket. Apparently, this group wants to take no chances in having to come up with funds to pay a high deductible. Meanwhile, those with household incomes of $50,000 and up and those ages 30–64 years-old are more likely to prefer a low premium/high-deductible plan.

“Especially for older Americans who may require more doctor visits than their younger counterparts, a low premium/high-deductible plan could actually cost more in the long run,” said Doug Whiteman, Bankrate​.com insurance analyst.

It could be that one factor complicating the premium-or-deductible question is the notion that most Americans are so turned off by the whole business of shopping for health insurance that they simply want to pick a plan and get it over with. In the Bankrate​.com survey, 82 percent of Americans who recently shopped for health insurance say that it’s just as bad as or even worse than doing your own taxes. Seventy-five percent say it’s the same or worse than getting the middle seat on a crowded airplane.

Even the dentalphobes among us would rather get a tooth filled than shop for health coverage; 23 percent of those who recently shopped for a plan say it was less enjoyable than facing the dentist’s drill and 45 percent say it’s just as bad (for a total of 68 percent who say it’s the same or worse).

Worse than having a tooth drilled? That’s pretty bad!

So, here’s another question to ask sometime you are with your friends late at night and you feel like having one of those deep, there-is-no-right-or-wrong-answer-here conversations. Ask if they would rather shop for health insurance or have dental work done. The answer might surprise you.

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Susan Rupe is assistant editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Connect with Susan →

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