Growth in workers' premiums slow as deductibles pick up the slack

Premiums paid by workers covered by their companies' health plans have risen only modestly over the last five years, but workers who get sick are still facing higher deductibles that now affect far more people, a survey out Wednesday shows.

More than 80% of employees now have to pay an average of $1,478 before their health insurance covers the bulk of the cost for health care — up from just over half of workers in 2006, says the survey by the Kaiser Family Foundation and the Health Research & Educational Trust.

Despite the slowing in premium growth, these monthly insurance payments have increased four times faster than income since 1999, the survey showed. The Census Bureau reported Tuesday that the typical U.S. household’s income increased about 5% in 2015, after barely budging in the eight years since the start of the Great Recession.

The new normal in employer-provided insurance can be hard for many to accept.

If you tell a typical consumer that there has been an "historical moderation in health care costs, they will look at you sideways," says Drew Altman, CEO of the Kaiser Family Foundation. "We're in a period of a slow revolution to skimpier, less comprehensive coverage that's been happening gradually with no national debate."

That's certainly true of high deductible plans, which are more or less popular depending on your situation — and budget.

"As a sweeping conclusion, when faced with a high deductible and a low premium, then people like them," says health economist Mark Pauly.  "But they hate them when they have a claim."

The challenge comes when employees aren't given a choice and the plans don't make sense for the workers due to other factors, says Pauly, a professor at the Wharton School at the University of Pennsylvania.  For example, Pauly questions whether high-deductible plans should even be offered  to people below a certain income on the Affordable Care Act exchanges, where the higher-deductible bronze and silver plans are the ones favored by most people.

Far fewer people were in poverty last year, according to the new Census Bureau report , as 2.4 million more people found permanent fulltime jobs. Still, it is low-income workers who are most likely to opt out of employer-provided insurance and to postpone care that they have to pay out of pocket for, Pauly says.

The "real danger" surrounding the increase in high deductible plans is when lower-income people put off care and get sicker because they can't afford it, says Altman.

That's of less concern to Pauly, as he says the limited research in the area suggests this doesn't happen, but he still thinks high-deductible plans shouldn't even be available to low-ncome people.

Even though the ACA tends to get the blame for changes in employer-provided insurance, Altman says he doesn't think the amount and prevalence of deductibles - or higher costs borne by workers - are related to the law. But Pauly says the ACA has likely influenced employers' decisions to shift to higher deductibles plans.

"If government thinks they're a good idea why shouldn’t they?" says Pauly.

Employers do tend to favor high deductible health plan coupled with a health savings account that workers and employers can contribute pre-tax dollars to, the survey found. Health care attorney Nancy Taylor, who represents many large employers including restaurant companies, says companies are also increasingly rewarding people for participating in wellness screenings and programs and contributing money into their HSAs when they do so.

Many are also eliminating co-payments for certain types of preventive care beyond what they are required to cover under the ACA, she says.

"Companies are very concerned about the rising cost of health care and are trying innovative programs to help employees," says Taylor, an attorney with Greenberg Traurig. "The goal is to keep the rate of increase down and ensure resources are available to the sickest employees and encourage wellness for those who can prevent disease."

 


JOIN THE CONVERSATION

To find out more about Facebook commenting please read the
Conversation Guidelines and FAQs

Leave a Comment